Revenue and Segment Disclosure (Tables)

3 Months Ended

May 31, 2026

Schedule of Segment Reporting Information, by Segment

The following table shows information by reportable operating segment for the three months ended May 31, 2026 and May 31, 2025:


	For the Three Months Ended
	QNX				Secure Communications			Licensing		Segment Totals
	May 31,					May 31,				May 31,				May 31,
	2026		2025			2026		2025		2026		2025		2026		2025
Segment revenue	$	72.3	$	57.5		$	73.6	$	59.5	$	7.0	$	4.7	$	152.9	$	121.7
Segment cost of sales	10.4		11.2			20.8		18.1		1.5		1.6
Segment adjusted gross margin (1)	$	61.9	$	46.3		$	52.8	$	41.4	$	5.5	$	3.1	$	120.2	$	90.8

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(1) A reconciliation of total segment adjusted gross margin to consolidated pre-tax income is set forth below.

Reconciliation of Operating Profit (Loss) from Segments to Consolidated

The following table reconciles total segment adjusted gross margin for the three months ended May 31, 2026 and May 31, 2025 to the Company’s consolidated totals:


	Three Months Ended
	May 31, 2026		May 31, 2025
Total segment adjusted gross margin	$	120.2	$	90.8
Adjustments (1):
Less: Stock compensation	0.5		0.5

Less:
Research & development	33.0		25.0
Sales and marketing	29.5		28.7
General and administrative	39.3		30.5
Amortization	2.5		4.0
Impairment of long-lived assets	0.1		0.1




Add:
Investment income, net	1.1		2.9
Consolidated income before income tax	$	16.4	$	4.9

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(1) The CODM reviews segment adjusted gross margin information on an adjusted basis, which excludes Stock compensation expenses - a non-cash expense that is not included in the CODM’s measure of segment adjusted gross margin when evaluating performance and allocating resources to the segment.

Revenue from External Customers by Geographic Areas

The Company’s revenue, classified by major geographic region in which the Company’s customers are located, was as follows:


	Three Months Ended
	May 31, 2026			May 31, 2025
North America (1)	$	73.8		$	54.8
Europe, Middle East and Africa	44.5			42.5
Other regions	34.6			24.4

Total	$	152.9		$	121.7

North America (1)	48.3		%	45.0		%
Europe, Middle East and Africa	29.1		%	34.9		%
Other regions	22.6		%	20.1		%
Total	100.0		%	100.0		%

______________________________

(1) North America includes all revenue from Licensing, due to the global applicability of the patent portfolio and licensing arrangements thereof.

Revenue Classified by Timing of Recognition

Revenue, classified by timing of recognition, was as follows:


	Three Months Ended
	May 31, 2026		May 31, 2025
Products and services transferred over time	$	56.7	$	58.5
Products and services transferred at a point in time	96.2		63.2
Total	$	152.9	$	121.7

Revenue Contract Balances

The following table sets forth the activity in the Company’s revenue contract balances for the three months ended May 31, 2026:


	Accounts Receivable		Deferred Revenue		Deferred Commissions
Opening balance as at February 28, 2026	$	202.6	$	152.6	$	14.3
Increases due to invoicing of new or existing contracts, associated contract acquisition costs, or other	135.1		121.9		5.0
Decrease due to payment, fulfillment of performance obligations, or other	(134.1)		(140.6)		(5.1)

Increase (decrease), net	1.0		(18.7)		(0.1)
Closing balance as at May 31, 2026	$	203.6	$	133.9	$	14.2

Current portion	$	160.6	$	121.5	$	7.0
Long-term portion	43.0		12.4		7.2
	$	203.6	$	133.9	$	14.2

Transaction Price Allocated to the Remaining Performance Obligation

The table below discloses the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied as at May 31, 2026 and the time frame in which the Company expects to recognize this revenue. The disclosure includes estimates of variable consideration, except when the variable consideration is a sales-based or usage-based royalty promised in exchange for a license of intellectual property.

The disclosure excludes estimates of variable consideration relating to future royalty revenues from the sale of certain non-core patent assets to Malikie Innovations Limited in May 2023, which have been constrained based on the Company’s accounting policies and critical accounting estimates.


	As at May 31, 2026
	Less than 12 Months		12 to 24 Months		Thereafter		Total
Remaining performance obligations	$	121.5	$	3.4	$	9.0	$	133.9