Motorola Solutions (MSI) 9 Feb 232022 Q4 Earnings call transcript

Good afternoon, and thank you for holding. Welcome to the Motorola Solutions Fourth Quarter 2022 Earnings Conference Call. Today's call is being recorded.

If you have any objections, please disconnect at this time. The presentation material and additional financial tables are posted on the Motorola Solutions Investor Relations website.

replay within call conclusion two call. webcast on be of a website our hours addition, of will this available this In after the website The www.motorolasolutions.com/investor. is address in All been a listen-only participants placed mode. have

opportunity You to will have ask after [Operator today's questions Instructions] presentation. an

like now Tim Mr. Mr. introduce Investor conference. Yocum, begin you may to your of Relations. would I Vice-President Yocum,

Molloy, CEO; CTO. afternoon. commentary will join Executive Mahesh Vice and are Greg today Welcome With call. me President, COO; and to Q&A. Good President, Jason along and President for Vice Chairman, Vice our review Jason and and earnings CFO; Executive with Executive XXXX results, Jack our Jack Greg fourth quarter Saptharishi, will Winkler, Brown, and Mahesh and and

this at non-GAAP call, those the a differ GAAP variety forward-looking motorolasolutions.com/investor. current These these an and noted. posted results will that from to expectations subject non-GAAP unless We've presentation on materials otherwise reconciliations statements. during number be the your A Actual results are uncertainties. release and to reference. we And reference and based forward-looking our outlook of made including financial of earnings presentation in news Q&A the for of These are include statements during materially during assumptions statements call. could portion risks and

to forward-looking Form and and with section comments do filings not about any that during Factors conference Report XXXX We made our the earnings on this or report such Risk could release, differences cause update statements. our news in the can Form XX-K, in Annual Information in factors of any today's reports other quarterly be duty XX-Q, any found SEC. on in undertake call, the

over turn now to it I'll Greg.

the to outlook. joining results business afternoon, us the overall and our few and start before about thoughts thanks going Thanks, and by takes Jason through sharing good us a off I'm today. for

public solutions. and our First, we're enterprise seeing highlight our demand the QX robust for safety results record security continued

grew $X.X XX%, points, of XX%, we record operating XXX flow. revenue quarter margins of earnings share billion cash expanded During the a basis by operating generated per and

to remained Additionally, last orders backlog record year. billion, up ending million strong, which of versus led $XXX $XX.X

Second, the year. XX% strong Products both security we by across growth segment, year our up LMR the last an XXXX backlog, board. Integration and Systems revenue driven and and year in grew ended was XX% we with record outstanding versus video In

Center. expanded segment by normalized also XXX points in We revenue and semiconductors. to Software growth FX growth. up security when and was margins earnings the costs higher headwinds, finally, us double-digit as Command despite in strong In of basis to [Technical XX% XXXX X% I operating related Services, for video another both And and well and look highlighted revenue positions by for year Difficulty]

I'll and our now turn call to through outlook. you Jason results take the to over

added fourth for were Revenue quarter, exceeded revenue guidance segments the Greg. quarter FX the LMR. driven in with during the XX% higher in you, during and million. acquisitions Thank technologies. both Revenue in and headwinds million, $XX record quarter by our grew chain quarter $XX revenues execution all while supply product enabling was three

was the in GAAP were particularly operating $XXX higher were Non-GAAP segments year first earnings [Technical operating operating up XX% sales improved prior driven margin the leverage, operating and GAAP last operating the in and SI Products and This both million quarter over GAAP up the from XX.X%. Motorola Solutions' was Difficulty] $XXX was in year. earnings of segment. ever XX.X% by versus XX% operating XX.X% were with and compared million, margin margins XX.X%,

a lower GAAP $XX driven from tax was and per earnings allowance benefit a the from primarily in $X.XX sales $X.XX up on or a of rate release effective by valuation per the million $X.XX, share share quarter higher year-ago last tax year, million, higher to up last $X.XX Non-GAAP credits. primarily and tax leverage. sales in foreign was improved acquisitions operating and U.S. versus against driven incentives. was year, million OpEx higher $XXX XX% by from $XX EPS due up QX $X.XX, on

For with unfavorable in $XXX XX.X% were related impairment growth the by all segments The currency was decrease fixed across versus earnings current year technologies. primarily GAAP in ESN. $XXX $X.X year impact or and was million. billion asset million to from billion, XX.X% revenue full-year operating strong exit acquisitions of in of three $X.X driven recognized both the sales up prior. was the The non-cash revenue and XX% XXXX, the $XXX our was million from

share up higher GAAP the material earnings up operating and Non-GAAP tax expenses XX% by asset offset in operating $X.XX, improved material higher lower to in compared ESN sales, the the costs. by was leverage, driven and from higher higher XX% prior, by related offset earnings exit costs, to sales, per rate margins year and were the charge $X.X of $XXX prior, partially partially million non-GAAP acquisitions. operating the XX.X% were and year $X.XX effective driven sales from and billion, impairment up by a higher

$X.XX earnings offset sales, costs. on operating higher share Non-GAAP by was and XX% improved XXXX material up -- $XX.XX, improved in per from higher partially leverage,

prior, our year, the primarily current were effective tax XXXX to benefits For video for from was to business. XX% the operating million our based $X.X from compared expenses billion, year XXXX, driven the higher by full compensation and due investments rate stock And in year. acquisitions $XXX up XX% into the in

prior up cash million was was free-cash-flow record Turning from $XXX up $X.X QX million operating $XXX billion, flow next $X.X cash with a to the compared flow. year, and billion, XXXX.

year. the included per higher offset working in Capital $XXX share, payments in earned year, cash with acquisitions, free billion XXXX an was related the for $X.X million at and average full higher in of billion, $XXX billion was price quarter XXXX performance share dividends. prior cash for flow Our inventory. in and operating were cash $XXX $X.X driven payments record to of flow incentive Higher with consistent allocation annual the the improved $X.X increase cash-flow million and repurchases cash during for by in XXXX earnings. And capital earnings the by

million Additionally, during new the outstanding we repaid million and of $XXX debt. debt $XXX year issued of long-term

to also XX%, our consecutive year increases. of We double-digit dividend XXth increased our

Products leverage, driven were QX The next sales, the Moving in million. and sales or were with offset our record in segment and of video. $XX including QX headwinds revenue quarter currency results. was In million Operating and by sales $XX in XX.X% up XX%, higher strong the in from earnings material higher and year primarily $XXX SI, LMR costs. from demand operating XX.X% by to million partially up both continued revenue acquisitions prior,

include wins a device from NEXT Some million $XX from large of notable this several NEXT the City orders, $XX QX from million add-on City from including customer, a APX million and devices. order U.S. of U.S. achievements large that $XX APX and a million segment customer previously the Dallas, $XX in Houston, purchased large

the Center fixed $XX a and customer, rail $XX Chicago. NEXT Command million System for order a in from PXX we large million quarter, during a $X international City, APX Kansas received order a million metro and Additionally, order for

material in year were earnings XX.X% and leverage, $X.X million. Revenue XX% For full million Full-year operating higher driven the sales sales from currency on $XX by higher costs. prior $XX sales, year, was the operating and up revenue LMR SI of by billion partially $X.X improved and headwinds XX.X% acquisitions Video. was the from from were higher up Products of year, or prior and billion, offset

Command earnings in was LMR expenses. and Services, in QX unfavorable last in higher and revenue X% from growth In $XX million $XX $XX was Services headwind. Total acquisition or Software was Center, segment QX up the double-digit X%, basis of and million were with $XXX X% million revenue XX.X% -- video both software sales, after XXX FX included revenue of XX% points a revenue from which of mix headwinds, acquisitions. up up million down driven by and operating year, FX while

million $XX million QX upgrade operations highlights managed for National Some Columbus, $XX upgrade camera command of and serves $XX multi-year Illinois the area; State software Harris Law large from million a Texas Interexport PXX PXX Lane Police; the million XXX in include and at $XX Police. a expansion in Greater U.S. services system recognition generation PXX services plate million for license expansion, County, million upgrade $XX a Georgia; multiyear order and segment for order a Oregon; Chilean for renewal renewal renewal extension $XX customer; the this the center order notable next which Enforcement County a system

year, were operating $XXX driven was down and video For XX.X% $XX the in higher prior sales, on services $X.X full billion earnings the versus Revenue revenue million headwinds was from or $X.X up Full-year center. acquisition by basis growth billion, and X% XXX points year, currency million. mix command of and expenses. were acquisitions LMR

both billion, in segments QX in technologies. America North on results. regional three our strong in revenue up $X.X XX% at growth all was Looking and

International headwinds. with For technologies. double-digit for billion, of North versus billion, revenue inclusive million, revenue up segments in significant all was America three up the in growth $X.X XX% growth X% both was XX% year in the International with technologies. full-year, three was QX $X.X And and $XXX revenue last year, full up all the FX

backlog. million contract. a exit demand seeing $XX.X billion, FX driven by was compared technologies. all we're Moving continued $XXX backlog ESN was of up backlog to three Ending to a unfavorable the of million the record of $XX inclusive to reduction and related $XXX million year, growth last The or X% the record across

up in growth robust of segments. XX% in sequential despite up video was up $XXX to to SI which the compared was both segment. consecutive This backlog segment, was record SI backlog drive million. demand backlog, XXth Sequentially, $XXX Products our QX with million continues year. In sales was last growth both order quarter the Products backlog Sequentially, this or in and and $XX LMR and million, record

to in up software America ESN Software by included and ESN was by multi-year backlog and orders Airwave exit, which North $XXX driven adjustment partially from or recognition North driven prior in of down million strong FX growth X% by Software revenue Services and strong million compared offset In FX, services, backlog year, and the was contracts. favorable unfavorable and $XXX Services, $XXX and quarter. America Sequentially, million last the

to now Turning our outlook.

between to up of with shares, and per share be weighted $XX and assumes share. FX XX% $X.XX a rate headwinds, average earnings and XX%. million $XXX sales effective This count XX%, approximately approximately per QX million tax share an expect of between $X.XX non-GAAP We of

billion a and $X.X share $XX.XX between between average tax $XXX For and This and of count and FX sales $XX.XX million billion non-GAAP the $X.XX rate full shares XX% we and of share per million effective XX%. assumes earnings approximately $XX per an year, weighted share. expect headwinds, between

to year in approximately acquisitions flow our be $XX approximately lower of up full-year that be $X.X relates we we last we've versus payment a in expected due million $XXX tax benefits made, expect in XXXX. XXX over year, tax expect last basis reason the video. to points our operating million And in XXXX million takes anticipating up higher is did basis inclusive to an one-time billion. continued and that year, last cash points to tax We're $XXX April. higher excess to rate XXX And taxes OpEx investments driven effect year We of cash by rate full share-based approximately effective IP is and a compared tax to also U.K. of compensation reorganization finally, on

you I Before decisions I wanted update to to business. we've call our on respect PCR made the with Greg, some turn strategic back to

a our supply to to licensed sold have third-party part some manufacturer. which the with order small moved a and businesses we optimize is lowest further model in to PCR, consumers of First, chain,

As the a product. margin will to change, recognize the result only equal from of revenues this we

a addition, we markets some exit Asia. decision in In made PCR to

of in a -- guidance for full-year We XXXX. revenues, XXXX our headwinds enter expect our adjusted an to is to the million these debt constitute X Year stronger sheet. contemplated XXXX and fully with $X.X We XXXX which net billion of with than And even an revenue times. balance we ratio finally, changes less ended EBITDA $XX to together New cash

pension In the the actions years. last is with over numerous a strong funded XX% addition, several our in implemented over reflecting we've U.S. funding position

balanced average a refinanced profile duration maturities maturity have with proactively of fixed-rate and approximately years. We also with debt our eight long-term established an debt

the this on and continue to gives be opportunistic us flexibility deliver All M&A. capital in allocation of our framework to

I'll now Greg. turn call the back over to

Thanks, Jason.

year the and despite three margins both sales a phenomenal achieved We and $XXX a operating growth revenue expanded the of segments billion related backlog, with record We was company. year. second supply challenges consecutive up million record to continued with XXXX double-digit the almost versus ended for year semiconductors we all the the in prior First, technologies. $XX.X for year

or our connection between Command our $X acquiring us and enterprise the safety recurring companies Rave portfolios. teacher addressable call almost XXX Center year. acquisition alerting Whether acquisition of public broad a in student was create set market Since billion of that safety video XXXX, of Mobile our revenue security public we've have to during the coordinating Rave with addressable informed more invested takers Mobile streams, button $XX Second, company's market annual billion. of billion. Rave more million security a or helped and and solutions. revenue we last growth, the of for quadrupled response, XXXX These push our assets helped revenue QX our a composition a adds accelerate Safety the to expands our be now by estimate $X to $XX approximately a have Safety amplifies than it's approximately seventh and what diversify

remains The funding security exceptional. for And finally, ahead, the safety look enterprise of momentum strong. as remains and environment public business I our

APX driving to early less the customers' installed that with than of refresh Our XX% NEXT are a is still base upgraded portfolio days in cycle in investments device very date.

help positioned enter and as solutions company. and we it center video challenges, continue be and Our another year year of I'm extremely software, to continue earnings this and ongoing will market-share supply-chain for strong how AI to command security Cloud growth in expect I we're the to gains the navigate revenue with pleased and drive

turn And take call Tim, over and your I'll we'll questions. now the with that, to back

Thanks, Greg.

please I'd we a to many themselves our question Before would questions, one as line to to question? taking accommodate callers on how begin as callers to to follow-up possible. the limit Operator, ask and you participants one like remind remind

sir. The [Operator Tim first with is And question Yes, will Instructions] you. our come Long open now questions. for Thank from floor Barclays.

Your is open. now line

over advantage the bit of like obviously it ARPA How that was next you. sources? through? what you of is Thank to give kind and backdrop, are Greg, just of you little could means visibility about your the a a sense maybe backlog revenue sounds strong, but How us taking pretty little think few federal other that years? starting do and flow that customers to talk

and margins talk on about we Jason, for would us getting from clarification, just then some gross increases a hit next And little seen and at logistics some we've model components you the and year through point walk should the year? flow and bounce-back the maybe how Thank touch on that the price margins. be next Maybe bit that gross just through you.

take Jack. is So, I'll this the first question.

was it but really regarding I federal think good funding, the news.

$XXX and of $XXX I is that million in orders But we over most think phenomenon. So had local multiyear XXXX. importantly, billion the was state funding allocated a

we through at So multiyear out at $X look our north XXXX of being funnel billion.

the deals -- or dollar. by in part ARPA Jason of cited funded funded that in were Some completely

So success. good we've had

it team -- seen understands our think traditionally really funding team really Our sales is and working we've they're North good in I models and results. well, America

will much And through billion funding, funding local, XXXX. I'll it's of for Tim, that importantly, remind education, but this most ARPU multiyear $XXX also and state into go and the earmarked you $XXX billion and for

capitalized the in this XXXX foundation the talked as the the funnel the But all of nature. of robustness dimension of it's strong part we funding multiyear he about best described, in and Jack environment So, is, year.

And part Tim, take question. I'll your of the second

we're that of semiconductors as navigated than was That's XXXX, about performance. through and what million QX QX. recall, access year, for part helped for to in that XXXX some you -- we costs headwind $XXX from So able last we We get parts brokers, incurred having secure our in XXXX to as us. higher XXXX year parts in a to

we planning remains do of for plan total play semiconductors, a XXXX are will in for believe broker a in run $XX we amount we to for dollars needing have tailwind it's secure environment, million and allocate of automotive-grade spend the So difficult to still anticipate we as plans and the but parts particularly that for about XXXX. still now, buying we parts, the as

So relative $XX to XXXX million tailwind XXXX's cost profile. in

expect up gross overall be perspective MSI, a in for to XXXX. And margin gross Tim, we from margins

be We XXXX. to in also operating up margins expect

Okay. you, guys. Thank

Thanks, Tim.

you. Thank

from question Jefferies. next come George Notter Our will with

open. Your line is

you guys. of impacting we're forgot Greg, kind a in you cylinders a The sort backfilling It that to feels business two out terms now about year ARPA all I be tax Thanks from seems the thoughts see could cranking of I whether a mean, it all? you for that ultimately recessionary the get its or environment anything over here. recessionary softness tell Hi, in business? funds horizon. very to on of at maybe guys tax are property down somebody But any tax slowing receipts, like receipts much. environment. any income or worry the about

all environment to as the know, year digits, as enterprise. be no, expect candid to we talked XX% of the XX%. exceptional, center about public is, strength. This We answer and you continued George, is video The still to as three environment, be about growth safety, to strong, funding LMR mid-single business, XX% is you. see about we with be is technologies in government be our XX%, command security

and -- budgets they So the an as in several are journal in there been was the flush years. article weekend, state as had last

We talked multiyear already for the about ARPA. horizon funding

The acquisitions. structure immune managing nobody driver on always We've Now, year year of been and a on in is OpEx recession. company for the higher the of period from this expense majority of is the generally firm. period diligent

and I versus have on we and environment, focused our growing development, portfolio, than market think faster So, product acutely we new execution, integration, great competitors. a are a continued the demand, fantastic strong acquisition

okay? not and the we look, team aligned question. Appreciate So, about where sometimes they now -- is good really I are. feel I'm that we But worried worried, the

Also Greg...

you we Any XXXX? the out from could. thinking -- higher what about to just rate in I one as look And quick impact if kind are business, pricing, growth then the just getting follow-up, of

last year. this by increases I our again that had that we've for the we that price. would I year. and surgically overall volume little drives price year a last talked and rate certain toward and increase. composition towards exercised number We've And price more would full-year growth is volume say this about was times year. So, weight both year, it also last growth bit slightly weight volume a I'd That driven volume it of responsibly

think we're forward. going I well-positioned So,

Thank you.

levels. that thing And PCR now orders PCR. which in are our of other business grew are part us our offer to the insights for Greg, It's into a delays XXXX or in nicely. or backlog XXXX unfulfilled I’d back

a amount and XXXX. to PCR sizable continue have we we backlog So which fulfill of into demand, will

a And it's And great the we PC-oriented great Jason's a still he $XX even expecting PCR Jason into referenced full those million year a growth point change PCR strong point, fact pre-pandemic levels. that despite to represents are the model blender, for back to an the XXXX because -- which ingredients those for QX, business had really we all headwind, with XXXX. growth

Thank Okay. you.

Thank you.

Thank you.

next Raymond Adam Our come with James. Tindle question from will

Your line is open.

thanks. could with give and potential Airwave We understand, costs headwind that chain. Good what Airwave. some managing I at afternoon. The obviously, updates for was question, potential Okay, happen point? Greg. could with on the wanted we is our this tailwinds to any from If outcomes looming potential the the start guardrails to there model you've got supply

out? things want potentially netting guardrails that just those make out you can So give and shape that us any could where on to we're sure

it's it's month, is is conviction finding next their overreaching. I'd that it's belief I'd CMA in make this that month, remind effort but their our maybe unprecedented, say soon. to stated and We full disproportionate, relatively it's remain you that what final a with So intention decision unchanged is,

view unchanged. So on is that our

a investigation ESN. have and Office on investigation exit the Now Airwave you signed can around is Home to we with I market grounded ESN. contract -- What successfully UK that, recall the the is update

was I Adam, of result, think both satisfied, earlier exiting effort in a good us us where ESN anticipated. it are multi-month will that than

ESN. services effectively out agreement We but then XXXX are a we are transition doing after of XXXX, in

agreement. intention worthy a because and that before we sharing was signed to I that, that we codified our do update an is think the of talked that's about quarter So, actually but ago

compete is semiconductors it's are because constraints there's we that, all having reports think, we're guide providers change that for $XX businesses lot continued that, Now both for, for lead it's full-year that we're times that with around the automotive as guide contending I industrial PCR. important business the and I lot we million chain with primarily year to better bottom look, full-year the or think supply know supply actually a not the the the a that with of said and unchanged. in We changed, guide we top but model largely and

and we all Xth, as informs we view as prudent of here, balanced all-in, that well guidance on think year considered. sit the So it's our things a February and

a follow-up that for I'm right. maybe there just metrics. a about maybe love Obviously, And to Greg, talk that I'd in into All financial billion, over you the lot on spending decision. just any Rave. expected went $X.X was ROI sure

if allocation? Sorry, that to capital I provide of related missed any you level could justify to acquisition Thank that that you.

is it's than we so thing, the excited else. us Adam, Yeah, important asset. about worth more that's to the asset very anyone an And are

when education, the that deployed $XX recurring the that revenue all spot profiled of state we that verticals. about goes an addressable around the a think So you business like and those is $X in billion and of how do which Molloy sweet market attributes, we against too market. of and with local XX% run annual million of expands rate ARR, the to their backdrop and capital what absolutely is

think an think else what and worth we're more and I industry extensive excited it it's about than about, anyone the excited we're view of well asset the to means. worth and So done it's us as we we've

have few here, education, significant this. mentioned vertical alignment and and healthcare corporate which to more A state us, for buildings. we is on things government, Greg local already the add that

portfolio. areas, to areas ways very with mentioned technology that part. areas I and plays want Rave important sides connects critically as augments of Probably In of highlight. very both All we security enterprise these Rave where are three a very safety some unique the before, public key in

enhances mobile apps. first safety is with Rave The individual

special ahead the So that happening more needs something with where the Rave be can people prepared as capability actually potentially a profile and can information about create of response actually offer effective. think so that

The needed ability to was capability help what as Rave from profile second Alert, notification is button. button a well. a needed, and mass keep informed. panic previously people as created is the push to The get benefiting as which

So think everything as about that safety, people people's covers that in -- safety. individual

second facility preparedness. area The is

So Rave think capability information can a better the where a that's about critical safe response, public about including and responders a facility very facility keeping safety inform capability.

the Rave incidents on Collaborates that coordinate help the set standard capable This up sure standard and and side ability should video it security happens. response. have side a an actually can uniquely various us operating that that make procedure procedures respond with command center orchestrate behind of incident the very how operating for along very sits enables when the the to of someone ahead automation to successful we

both for And are, dispatchers XXX lastly, individuals XXX information response Rave location the from to third suite area of where as and terms is very information that as and information allows such provides site, Reva directly sharing. also the other cross-jurisdictional it in whole. accelerates critical information, of video The a

security the one three center, plus as really here greater enhances those And Greg all than overall command two. take is You with capabilities enterprise actually much portfolio. our one it said, and

you. Thank

Thanks, Adam.

Thank you.

with from Stanley. Our next will Marshall come Meta Morgan question

open. is Your line

Command just guess or the sense your already of Just than to two solution up that following more response, kind that? Center laying more the any is to seamlessly Rave, is interoperate helpful one-to-one there's when Video into really of a there kind and Maybe could Thanks. solution? integrating Great. which of of any solution built timeline just with out kind was of getting integration. that kind kind that become if I of timeline does very of Rave on the or kind in the

of And meaningful has backlog mindful the that just Are then pretty how should significantly. backlog question. to any changes grown thinking Thank you. when there we peel and that a just would off? duration second it about maybe Obviously, be

What what products like elements this elements. just -- already more timeline come, XXX our it ways Center and that with that do, of integrated is that and capability, being the in also appropriately it and I connect But a key the happens center to more starting many are today, leading the the exist and all informed use Access side, differentiated. outlined on a Security people we us whether cases our would today. of with of or And detection some that's portfolio, notification in the of of terms able people, is to that's mass able unify on today. command dispatch, and today. capabilities those capabilities they being Just various the those within product where exist exist an are safety make capabilities There element And to alert that and Control public along incident, but helps solutions to future-looking side, inform Command that's during situation, the the response to these enhance portfolio. Video we

more today. come there's greater on where to base that's than the two, So the is capability this, one plus one but

the On backlog.

in million than our of up the last So up $XXX is it's it year. our backlog, backlog billion, products. duration the better even not only total been is $XX.X in had And it to

well we're that for the So position backlog for as in year. the a we the strong continued expectation orders execute during as on

Great, thanks.

Thanks, Meta.

you. Thank

will Badri Suisse. with next come Our Credit from question Sami

line Your is open.

public of seeing funds refresh they very radios, elevated XQ very you're orders and institutions has the just much, strength and rate is, the The the state LMR what's which order how and a XXXX and refresh are rates LMR? you ARPA and safety My robust question in levels APX is of your NEXT do the with the guidance. radios. a thank to of are typical and the congrats local partially typical very robust explaining compression to budget catalyzing question in Hi,

Jack. it's Sami,

of August the that tier I things as innings been at highest where early one, call in America. introduced APX NEXT North So market, of the focused. couple and I we're A upgrade PXX was believe that's in Number cycle said, in the the it the out. was of point to it's

of half XXXX, portfolio. we've second the meaning recently, in Just that filled

NEXT call we now outside have of will itself municipalities in $XXX cities. available. We've you of done the orders product accelerant of a what APX an So county lot announced. and million That be mid-tier for and big of a since the was suburban

budgets XX-year in To $XXX And of an surpluses question, largely the pull to they had it ARPA a million be you Houston to cycle, But cycle. leverage for in budget of be I'd kind point funding their like give some used own City of the that accelerant -- feel into the will move this ARPA a actually refresh without you that we've to that seven-year funds, seen refresh to a use orders XXXX. forward device. accelerant, actually but

a think device. want to really that things I their there's do few this. with more People driving

clearly, used a LTE and the go XX,XXX minutes bug to done do compatibility. the [indiscernible] leveraging SmartConnect, tough can owner fixes those hours to mutual now, take to extend XX people refreshes, experience. events, get to ability kind it's I It the in them cyber technicians. actually the to big be police upgrade so, software, mean man of network that as And city department,

add our GPS we've And the for last provisioning thing is seen through our location been even matters. And networks has that customers. a CAD big is capability what

been lot there's a And excitement. of clearly so

I with the that You've of very clear, think did marquee going expect we accelerant. to lot I year. that last just see And to to be million departments. do series launching, seen we're year. And I double orders to a $XXX police of this continue think mid-tier

all the product probably APX that fair -- launched, network, operational public most cost private product in is reasons LTE and Jack think it's of about, as is helps, tenure the savings. the NEXT successful so its strong think network, I the think what LMR that and certainly most it I say Yes, my funding in environment LMR seamless to all and successful but in itself we've significant talked to obviously, the for the capabilities, And roaming, is does I anything. as unique

But your look we one integrated clearly much color. like we Ava away in can how with really going of guys follow-up away or is, much more of be Got think all you a from going type far to guys other broader it. end at fully to when model. Rave front-end can are for you they're offered back far question at on acquisitions of customers see service back a we look that question this offering mobility. for are -- other Thank have How to they end look made, think us is giving when Rave, The integrated lot analysts suite a bunch bigger with you then the being side? the bigger I where the and consumption and I a in consumption market-ready look we have at these Security, for way you the

together I manner So all Reimagine key And elements these bring Reimagined before. our in response fashion a of think Safety that to talked element a is that times of facilitate Safety program in orchestration integrated is we've few an where a more the about program incident actually and effective. response

platform camera the lockdown, called very how Orchestrate behind software different enterprise say, field public developing time of visually and to mind, the are then and these with actually -- And as piece I capabilities is a Reimagined view starts able allows as Safety where of today. us as are we dispatchers to in a now control professionals of is this able triggers between facility, we're that automation platform, of informed connecting This events safety a that lockdown going to a security [indiscernible] a perhaps say, are solution. an which even mass access professionals actually sell trigger do notification access say, scenes solution, control So that visually pieces in the to detect to we Orchestrate the can think from, starting following able together in that individuals should to -- XXX, being have our call Collaborate in that spent mass are. people these turn notification trigger, be to our to

mentioned excited public the to earlier, In because education. it we're map about Rave as safety I Greg that addition extend the selling to channel Mahesh to product integration sales into and road our allows us and think, described,

the owner that that believe sales the is we valuable Molloy's of part Jack immediately, product most asset. we're in gets accounts. selling is organization those as today So into of why the power that it entire organization, And

certain markets. to is they are there also a accelerate the view but Sami, customers video starting to see an I in solution on-prem from divergence important of infrastructure just control market really fixed that an of little of without cloud. market, access seen are a want bit from of critical standpoint, to for particular, think other video that point another And then you've points a from in terms security, security, couple -- on-prem question, We out. VMS security video

take of done We've a to things advantage. couple

the or customer, That's the we're portfolio. a analytics deliver forward, moving if cultivated customer on-prem So capabilities an our we've to that you'll to you're be to leverage within important. able camera going have you're cloud

other we The Avigilon We've under three and acquired that is, important X, Center had as And remember, to you our experience Pelco. support. different VMSs we unified that's IndigoVision VMS. that we thing Control had ACCX, which also is essentially

been a your has make things those sure couple to as progress you well. there understood want of So just point. to I

Awesome. Thank much. you very

Thank you.

Thank you.

Our Najam Fahad Loop next will come from with Capital. question

Your open. line is

guiding taking for wanted at XXXX full at year-on-year the question. you you're year guiding XX% of you're XX%, to kind to of to yet revenue X% XQ maybe Thank I look your growth. outlook, my grow linearity

slowdown the to times outlook but later still, counterintuitive. trying chain, implies half year, So it it the which changed -- you're for supply might kind chain implying like the second of I'm a lead the understand sounds improving, supply global in indeed that you I the in But linearity almost year. see haven't question your of is

your through So walk assumptions? can me you

first, the of you we from year would rate a first a where set the almost and at rate that. half, the X% double Sure. last Fahad, I half second of point comp grew in to,

comps, So in it look at expectations last if year's you year. part growth this our for informs

PCR for half. for helps Secondly, higher moving we license. but of all The growth what expect model second impact growth $XX we to year, is the talked majority occurring business change That us. inform about half that first this in million in the

And our mentioned, we'll a progresses. based top unchanged, Greg informed is guide as the the and as And year that by on we lead update our commit we business to times times with current suppliers us, the it XXXX. suppliers lead continue and XX commitments our yesterday proactively, We supply did work which information And with environment supply had latest our have in and summit just from to the the we commitments. them. forecast

thoughts to your revenue my For video surveillance. wanted follow-up, for outlook I on ask your growth

that a the You've has recently FCC XX%-plus. business. been wider of Dahua favorably has I'm band growth. If for not grown the you've last [indiscernible] that implications talking announced bigger over years, two that more mistaken, now far your XX% But business products probably

your SEC So thinking growth about how business? should your XXXX? surveillance ban we are revenue be thinking And how this new about how you video does and impact in

Fahad. Sure,

the excited, we XXXX conducive. But in XX% I the really think mix, NDAA to a outlook our of XXXX. any off within just said course to point grew the think XX% So have think we pretty general, going impact XXXX. I'd it's we it's tailwind over growth. particularly the the -- we're real it's for out difficult But a But business. things XX% don't we outlined. generally as profound And in We've kind is is significantly the comp, of

two And as We where again, of now to it's insulated But standpoint portfolio is think and terms and commercial standpoint. generating I if they're coming of where health as largest at care other Our getting from verticals. we're economic market Government we take education slowdown. have think space offerings it are that kind I think piece an of on-prem in well together. we're as look a the the is little important cloud also a is well. And there XX%, -- bit growth. any a that

Video of top or part driven that XXXX in was rate point also by the out in acquisitions. Security, the like before, growth some of I'd revenue Fahad, higher growth rates

those normalize at the strength into underlying you you look and As growth base it's much XXXX basis. and of comparable year-over-year XXXX, rate go the the a into between on more they acquisitions XXXX and and

the I Thank you. appreciate answer.

Fahad. Thanks,

you. Thank

Paul next Our from JPMorgan. Chung with question will come

line Your open. is

Hi, question. thanks for taking my

very I So this about year model? strong and the top can modest benefits growth you're kind seeing saw leverage in you kind revenues operating talk OpEx you line. mean, of And in organic record the despite of

So one and margins on expectations pace the think next the there as And Can of the we think you spend, we mentioned shape up other expand throughout also follow-up. year, about about you costs and year. magnitude the of acquisitions? of incremental have And do to this Rave related kind how year? gross I your

Sure.

the we OpEx. million with expect technology. $XXX be continue drivers that start I'll within with year. make are, this video, recent up in of our Rave, that acquisition, is mentioned So to combined The fact, fastest-growing that investments to primary I which we OpEx

the XXXX, to we will largely product operating us And volume mentioned the the of continued leverage in of that in both leverage, Greg the terms tailwind the margins mentioned that benefit that drivers earlier. on what the lower for second with we'll line, we XXXX million In to we segment. expected XXXX, costs of in margin in expand we saw then half expansion to part, a attain pay had continue expect XXXX. and $XX operating and operating supply I in in growth price

that free to to of nice Thank earnings kind cap million cash year look as working Great. year cash here always flow, contribution to we then cash drag. trends free flow. and and see despite record cap for driving XXXX, working Okay. very the which And free dynamics strong on we end $XXX strong It's performance a flow? could overall how But for do XXXX, think about you. be very

Sure.

out CapEx flow. So similar $X.X last in operating to billion year. we be looked pretty cash will

capital a XX% than have likely number as continue. of OCF less is that percent model, allocation now, we that's of It's in CapEx the a our XX%. around to our and years For actually

low asset light We CapEx are kind of a model.

are inventories $XXX been served So It cash and navigated growth, asset. record us did demand, as use higher to cash growth, customer fulfill We'll earnings flow we'll as OCF, through it have well helpful But good into to and in earnings. planning come continue work in we an good through we OCF, it expect we'll well. meeting as as we incorporating as inventory. to us are we'll for demand, XXXX. million in customer we'll work XXXX but getting I Inventory plan but XXXX. continue and lower mentioned XXXX down we'll we higher growth to continue has investment for amount that a see tax in

Great, thank you.

Thanks, Paul.

you. Thank

question come will Northcoast next Our Housum from with Keith Research.

Your open. line is

our a and for Good quarter you and on performance great consistent afternoon, guys congratulations guys.

we the about update are mix a device the systems upgrades? going think integration upgrades that guys list. the lot we NEXT back kind obviously, upgrades are As of more out movement call talk was that about that only guys toward product one included saw refreshes, through? APX you system your business, And of of there's between guys a system and your device Can you you but seeing guys you versus in the

in journey for for are us. And their infrastructure a them wise. journey technology systems business North one that We're call less keeps transitioning point predictable is which I'd seeing several of our current us. both, for a a upgrade arrangement, been on It's have customers Keith. them The customers that is we an on stream is their large years, revenue to thing predictable and more it to lumpy America the more over SUA. arrangement number past always for needs, That

both continue So revenue upgrades. told you P&L we'll we'll in are in innings see in And for we the early higher of see upgrades. upgrades, but but services a that. product-related cases, come We the it we'll where some systems to upgrade, devices see systems through

that's also it model stations -- of continue that this more into will be an a into It's as our program, Managed business revenue for be But pointed for -- point. networks it's for replacing an terms pivoted well. recurring it's of Jason, base it's these and software, it's out, but is and come accelerant good Support in SUA as There'll Services to a will. it been Jason us. largely, meaning, been opportunity an elements also

growth XXXX. are driver primary the Is Great. elsewhere pay a XX% guidance starting above [indiscernible] follow-up the Thanks. Command expectations Center here. of for guys that dividends? integration And is Or as you of question success Rave? to here, seeing the

we is Command and Rave, XX% the expectation the that XXXX. double software but digits, in low executed to inorganic of Center addition grow expected which the rest consistent had of includes also with too

I appreciate Thanks. it. Great.

Thank you.

will come next DePalma with question from Blair. Our William Louie

you're make please that Your sure line is Louis, open. unmuted.

Mahesh, Jack, afternoon. Tim, Jason, and Greg, good

you? are How

are Motorola Related to how has financial of of well. and in to learning the in the division, machine conversation your vendors how topic you tools of Video be that mainstream tech automation Thanks. in at now? the And couple the general, powerful past recently AI of analysis years? with the deserves how artificial been some discuss ChatGPT. Can leading Doing intelligence AI with your IACP your that you video And over showcased conference? has progressed

Sure.

So natural in a ChatGPT, pretrained and I lots it's understanding, been advances in long of time, learning, technology language development quite think from tool. that that generative has it stands for that for the the reinforcement transformers, GPT, of generation really benefits the and third

license needs then out and cetera, map potentially cetera. side, to a supervisors out taker it, into the the transcription smart we of on names, of of we able that bit, are understand entities elements Now language a natural heads-up et that natural call numbers, a we forms, break kind to what pick capability do et up you help, language, if plate fill a where think give little that addresses when

we're natural searches. video facilitating of where to think On it language what we're doing, the and that side, language, so video as things converting taking like actually

one that very the the edge. capability us this with results able at upon what asking able of the as well. portfolios, to of extend board, to specifically, across all across is our allows do Calipsa inclusive cloud cloud. AI the provide cameras Pelco -- Avigilon give different into rapidly that that things And that capability a multiple video. are understand the with effectively automated to of we're to to of acquisition into of based And do our is able being that So Calipsa, mapping analysis we're user the that for And and our set returned

are So okay, them. we those being two to on that unusual things can alert of now another happening, together give them say, capability one activity particular if us there's events the

where our area that is language of from one an across point understanding indicator we're understanding think, advanced. audio the learning So pieces across and We're it machine I or just multiple is of really to benefiting one products. implementing all understanding, of element ChatGPT, that across now video

answer a that's hopefully, to your So rough question.

group? talk helpful. One and you question. it could Thanks. video dozens of on significant hours from more was sure announced That I for solar topic. powered I'm growth deploying Chicago for portable that area city of was the the Yes. was that platform video cameras you Motorola East Avigilon. Indiana a week, as week, do view solar-powered analytics Last Last wondering,

do today you're But So Avigilon there's for solution. and happen sports this a Many times, deploy is two rapidly sure not events That about. need part entirely solar deployed sort [indiscernible] happen is opportunity with events are that I'm of for sites talking of platforms cameras of we deploy or the applications. construction for you that probably concert broadly, it. have that areas, more specific X

other end of is the license plate We The recognition part it solution. year. of automatic our introduced the on camera towards last LXQ

And that is a fully wireless solution.

DC equipped or So and powered it can it radar can solar AC is a capable. with It is video camera detection solar be is connection. also that as is powered LTE regular It mechanism. both or powered. It with be a a

camera ease today. its are of install of fully is out a in And its seeing So easiest because device to rapid there all a we probably that wireless uptake video is fairly solution it capabilities. the install in -- it

looking Exactly was I what for. Perfect. Thanks.

Louie. Thanks.

you. Thank

Research. come with will Our Bollin next question Cleveland from Ben

open. is line Your

taking for Thanks everyone. question. the afternoon, Good

to could The would safety about materiality funding and of of but reimagine, starting some that you COVID through types space manifest. that in talked relief Mahesh first maybe item how you're that projects the K-XX I is helpful. seen had the late, curious, other of I'm to as talk is, trends be talk you've any seeing

Sure.

is school in largest last continues pointed growth Access been And as to outpace I million it's it as to safety. but XXX allocated in the XX% earlier, outpace to business. terms grew billion year, -- education education funding Control. our continues There's of & we our much out Video Security So -- vertical even overall

their control, is to if It's brings provide a ingress/egress an there's terms door, intelligence radios in there's one PCR at what but things everyone not doing. in of safety only and ability interoperate, video it's school also motion it with mean is teenage things to security, it's that that paramount access of like to that. and driving play Stadiums unusual huge happen. there's a I in terms kind happen role if a of things. things lot of an of analytics think education in in stadiums success altercation a detection, our kids those in And cafeteria,

great have things culminated those in all kind opportunity. So a of

market One is to a hired matters all knowledge we they the core things early our up of in days every the we making believe work group and with did domain and day here team of actually -- we're sure right the went going do out, making beliefs we the get back of definition. space focus educational one is in product expertise, because terms and is

a add, solution before one The wanted the have a get bought accelerate lot of there. other and who a actually at the system Ava we I'd of But as growth we a schools private thing attention. actually to we well solution. opportunities reasons education private public in is lot didn't of Ava at schools cloud We we've look looked identified

you within Okay. to you That's is Jason, said Greg, think doubles. Rave ex low in XXXX. XX% The follow-up I growth spoke great. Command Center,

total, a a of you there, systems longer X going at overall or several revenue If the grow a a it's years. it. those among That's about little A percentage look term, stable, motion customers? complexity to lot of last percentage and of of when of about talk Command the the driver you. bit get bigger investment sales as might think as that things you if be widespread mix Center Could pretty you the mix, a the Thank on. the been over points you more

mean you got -- answering is safety to have we about XXX the its CAD have police. about terms primary thing four and America. And you as consoles the Central at had you radio of in what very X,XXX well think talked you you points three you've point to I look Command North had see proactive public a is a which and I to in more I respect to are think taking Aware of consoles we've think in there place, RMS, had widespread. -- There I'd as historically, Yeah. platform, RFP system, some different where meaning mechanism cycles, is, market

screens, look savvy of market, seeing, at They what more multiple is instead to the unified start technology. particularly at with different of the want commonality they experience. a ways operating piece want looking And see we enter dispatchers different as probably we're I interface to to that technology things, and different think, newer to a four software

on So I that and turn to a go of kind like everybody Microsoft suite, they've know thing this would to made the just reality everybody is, investments.

of Some three cycle, bought ago. And RMS us. new years and think a there's to benefit them a maybe we just a that. to there's cycle But it's system a

us from I they buy job a bad things have team his is isn't in three have done us. and things those a put us think that customer. for of It of And because one conversation with if the a cycles a to position great they Mahesh buy they different in

think the like a well. As as margin there long there's deliver, as they we we experience opportunity

Thanks, Jack.

of or of County And -- previously this to then our that County deals that and solution mentioned there. software center the in mix we of hybrid one-third at command revenue. quarter. actually total year today, command center X they is are solution X at the transcription [Technical one Harris deployment as actually element about Greater performed date. smart last we mentioned the over XXXX, largest just solution actually how Difficulty] And transcription looking An times our was Greater have the growth SaaS -- cloud-hosted And that customers least was I of smart important Harris

adoption into are of for solutions us. that's well hybrid And so going we that, and seeing more growing

Thanks, Mahesh.

you. Thank

Our last Cowen. from with question come Silverstein will Paul

Your line open. is

last ask or only what stripping I And out a to what could other you'll give is lot of inorganic the organic does Greg, serious guidance compare an in biggest [indiscernible] organic I this XXXX? or on any translate that. appreciate growth that the terms, to -- But Rave hope acquisitions? how from year? assume I you're expecting does awful I the note, Rave in that contemplated piece questions.

Rave. -- largely year, to Rave Rave. contributed this of Last it's largely year, million from $XX-plus revenues $XXX million the It's inorganic our and around Yes.

So that's the bridge.

you're other guidance, -- that it's not less a less, putting don't deal prospective and in than that You anything in terms fair than of acquisitions was in disclosed, have contributed? Rave acquisitions obviously what

It's we the That's business it as today. and right. have it see

grew the I growth single and question, X.X% business LMR it's into have just last And understandably, I X.X% next a characterized which digit. your that the appreciate right. X% All year business a you think before low that. before year for historically following ties year that

growth. off And very so and came had it year even a strong strong

-- the you the one mid-single-digit to mentioned throughout terms of downside relative $X trying to number. what in I just review I'm PCR I'm a In don't understand the level upside know it You you on back gave this potential. understand it of touched trying LMR, -- the to can that is was billion to the but was call, Can us XXXX. the you potential -- up. of on think review you up assume [indiscernible] drivers were guidance the I referenced upside I assume key that? in that you've

think drivers, you're various cetera, was the level. you And awfully to But APX, PCR, I can the that growth? that et going through go what forward? contributed that strong expecting

say let's and foundationally start thematically. I'd Paul, So

customers most operating clamoring product I think LTE or their LMR platform. the lot Where it's the LTE over-the-air efficiency a or feature first we land and number being has about the eliminates a a APX high-tier mobile an foremost APX ever expense. NEXT, versus had. Number software durability the roaming, one. talk alternative, radio, device, MSI are functionality, statement given premier minimizes NEXT two, as that the about for it successful launch of cellular strength and

NEXT, NEXT then refresh. and introducing we're APX And taking mid-tier the we're APX

about XX,XXX you So networks the think more LMR broadly, there's around world.

and TETRA You take PCR subset we're add NEXT centric that North device of mid-tier. enhance American as refreshing high-end the portfolio by led well, APX continued the way, and portfolio portfolio. and a By APX you whole have the then PXX NEXT, and better to refresh with a we've mid-tier

returned even that the of best point, business in ever certain has budgets recognizing they've Asia, model end exiting PCR years Then you as had it's instead prepandemic countries strong And margin $X funding in to ARPA levels. around and not still state record to are up with of backdrop grow as and back off to and in And it's about the billion. been XXXX. had top it add full [indiscernible] of change a we PCR revenue, expect quarter your to

powering functionality the for to LMR that, best-in-class platforms not with [indiscernible] you Center technology have. slogan. not So the device portfolio and comes product. Access forward. a reality the security Control demand This integration to have the need and and a of is a refresh, video That's a not That's have, and just like the are feature this that things Command and mention to nice

Now why mid-single guide. year, relief driving that's we're that But that quarter or I ago. two throughout on that you. were there's supply-constrained Because still as if in you, we'll front changes a what's remind the digit? a or the are same environment. they still inform times Lead

any But Greg, respect that on us my award? digit, you substantial permits, collect you told all would to accommodate to Hytera update I question, with in being if more not able than just that last demand litigation that guidance. X% mid-single think supply

in no They it's expectation $XX year. By progress. in We've that way, in collection for XXXX de minimis about million. our that assumes cash the a saying, us Paul, some worth relatively Work fiscal collected flow amount. owe

a Our trial We've trial. level XX criminal XXXX. that count the hold Hytera court make February a to for payment. federal at have royalty to in in failing of begins the is the Civil contempt They DOJ trial asked

that's We'll plays it's the to Look, it's to do. intellectual thing how Hytera, slog. multiyear they're going fee engineering had, senior long to a property out. by We're protect his the U.K., see CEO, the the right against [indiscernible] ago a to Hytera guilty. but fight reported of in that changed way, It's he firm. plead the guilty defendant, this and for several months the executive it We

of long, assumptions forecasting justice But and relatively from in there's takes we'll standpoint. fiscal or tuned slowly, I the and XXXX, a wheels but update you know zero stay our it cash accordingly. terms of grind So for

that. of Guys, that to bodes your question. other. accommodating new the in that back still hand that's take-up there's and richer going point and and for assuming appreciate I one I APX can well one LMR command Greg, goes services, the customers NEXT new made a APX Jack X the take-up cetera, et order just the and historically with the the so hand case, center require deploy. thing of software handsets previously in have that think to the for APX trust fact I more handset I clarify strong you incremental the applications Jason

the the has software device Well, there in themselves. that time. That that of NEXT are upgrade capability applications platform the to fact APX the apps add is and over embedded

I appreciate it.

you, Paul. thank Yes,

This Officer, the and Chief remarks. Executive over you. Thank Greg floor the session. does back and right. turn All would closing Chairman any conclude now for question-and-answer I additional to like Brown, to

double-digit by thank and for costs line billion. utilization everybody, We it would higher margins the more despite important seven than year now. you, around expanded and joining do summarize for we companies of the semiconductors. year. Thank saying was outstanding input been is deployment a what growth. just revenue year has the We I capital of second never mean, $X.X acquired operating truly call. of last consecutive I top

into every We've record And part security. multiyear technology single customers. safety remains role environment passion, our our want call. this an strong got this purpose, strong, we're company that's intersection This orders. record as our demand We've The reengineering, further heading trusted the very exciting strong listening enterprise to is and fortifies into exceptionally incredible and I a year. funding. ecosystem, breadth Motorolan adviser backlog. I this public got with at thank mentality. innovation of to the think, of We got is, width The

you community. a in, the participated and Thank special on yesterday above to forward a joining, few serve these you appreciate the and again beyond. It's months. we you that and referenced everybody Mahesh to updating for Jack, I commitment with conference in the I as all. look appreciate we to call. And commitment supplier and I heard and Jason in are the people

Internet does today's We of time. address and be for available Ladies this A ask lines will teleconference. your this this disconnect two website your over call that the replay is at motorolasolutions.com/investor. please hours. you and gentlemen, you The within conclude thank participation