Blackberry 2009 Annual Report Download - page 34

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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 FEBRUARY 28, 2009
32
Stock Split
The Company declared a 3-for-1 stock split of the Company’s
outstanding common shares on June 28, 2007. The stock split
was implemented by way of a stock dividend. Shareholders
received two common shares of the Company for each
common share held. The stock dividend was paid in the
second quarter of fiscal 2008. All share, earnings per share
and stock option data for the current fiscal year and prior
comparative periods reflects this stock dividend.
Fiscal year end March 1, 2008 compared to fiscal year
ended March 3, 2007
Revenue
Revenue for fiscal 2008 was $6.01 billion, an increase of $2.97
billion, or 97.9%, from $3.04 billion in fiscal 2007.
A comparative breakdown of the significant revenue
streams is set forth in the following table:
Fiscal 2008 Fiscal 2007 Change - Fiscal
2008/2007
Number of devices sold 13,780,000 6,414,000 7,366,000 114.8%
Average Selling Price (“ASP”) $ 346 $ 346 $ - 0.0%
Revenues (in thousands)
Devices $ 4,768,610 79.4% $ 2,215,951 73.0% $ 2,552,659 115.2%
Service 860,641 14.3% 560,116 18.4% 300,525 53.7%
Software 234,388 3.9% 173,187 5.7% 61,201 35.3%
Other 145,756 2.4% 87,849 2.9% 57,907 65.9%
$ 6,009,395 100.0% $ 3,037,103 100.00% $ 2,972,292 97.9%
Device revenue increased by $2.55 billion, or 115.2%, to
$4.77 billion, or 79.4% of consolidated revenue, in fiscal 2008
compared to $2.22 billion, or 73.0%, of consolidated revenue
in fiscal 2007. This increase in device revenue over the prior
year was primarily attributable to a volume increase of
approximately 7.4 million units, or 114.8%, to approximately
13.8 million devices in fiscal 2008 compared to approximately
6.4 million devices in fiscal 2007. ASP in both fiscal 2008 and
fiscal 2007 was $346.
Service revenue increased by $300.5 million, or 53.7%, to
$860.6 million, or 14.3% of consolidated revenue in fiscal 2008
compared to $560.1 million, or 18.4% of consolidated revenue
in fiscal 2007, reflecting the Company’s increase in BlackBerry
subscriber accounts over fiscal 2007. Net BlackBerry
subscriber account additions were approximately 6.1 million
for fiscal 2008 compared to approximately net 3.1 million
for fiscal 2007. The total BlackBerry subscriber account base
at the end of fiscal 2008 was over 14 million compared to
approximately 8 million at the end of fiscal 2007.
Software revenue includes fees from licensed BES software,
CALs, technical support, maintenance and upgrades. Software
revenue increased $61.2 million, or 35.3%, to $234.4 million in
fiscal 2008 from $173.2 million in fiscal 2007.
Other revenue increased by $57.9 million to $145.8 million
in fiscal 2008 compared to $87.8 million in fiscal 2007. The
majority of the increase was attributable to increases in
accessories and non-warranty repair.
Gross Margin
Consolidated gross margin increased by $1.42 billion, or
85.8%, to $3.08 billion, or 51.3% of revenue, in fiscal 2008,
compared to $1.66 billion, or 54.6% of revenue, in fiscal
2007. The decrease of 3.3% in consolidated gross margin
percentage was primarily due to a higher percentage of
device shipments which comprised 79.4% of the total revenue
mix in fiscal 2008 compared to 73.0% in fiscal 2007, as well as
changes in the BlackBerry device mix. The decrease in gross
margin percentage relating to the increase in percentage
of device shipments was offset in part by improved service
margins resulting from cost efficiencies in RIM’s network
operations infrastructure as a result of the increase in
BlackBerry subscriber accounts and a decline in certain
fixed costs as a percentage of consolidated revenue as the
Company continued to realize economies of scale in its
manufacturing operations.