Motorola Solutions (MSI) 3 Aug 232023 Q2 Earnings call transcript

Good afternoon and thank you for holding. Welcome to the Motorola Solutions Second Quarter 2023 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 three call. webcast on be of a website our hours addition, of will this available this In after the

website been participants mode. The www.motorolasolutions.com/investor. a in listen-only have is address placed All

will Yocum, [Operator I Tim you your presentation. Yocum, may You after President of introduce like Instructions] an begin ask would opportunity questions have Investor today’s to Vice now Mr. to Relations. conference Mr.

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

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

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

I’ll that, to turn with it Greg. And over

joining Tim, today. and thanks, afternoon, us everybody, for good and Thanks,

strong driven to And guidance. growth improved earnings all Software another up revenue continued up was XX%, the operating and a Systems with demand and both Services, technologies. operating XX% quarter across a share in were XX% Products In revenue in growth and and QX in exceeding Integration, robust per led by in earnings growth segment. and and outstanding revenue three availability earnings chain our supply XX% was First,

ended with $XX.X of we billion, ending the up approximately last also QX million record $XXX versus and Additionally, quarter million year, backlog $XXX up approximately sequentially.

our double-digit revenue in Security. both exceptional XX% was Video in with both in three and in Center Second, segments growth regions during the performance including technologies, growth broad-based, quarter all XX% and Command growth

earnings during and quarter, prioritizing sales we’re strong We continued also again share. guidance seeing And and saw segments the results QX strengthen both across raising both the year customers we’re technology demand driven investments on by public record safety for finally, the to QX and full in orders security. based our our business, enterprise per

to call I’ll Jason. now the turn over

XX.X% you, million, added Revenue with for double-digit the Thank were $XX quarter both grew FX $XX guidance the Greg. three and in headwinds regions XX% both GAAP quarter in growth up from year up and operating operating XXX and earnings margin million, were operating earnings the year non-GAAP $XXX quarter XX.X%, the up basis XX.X% from of quarter. or $XXX points. during technologies. while our was all in ago million ago sales, million. acquisitions above was were segments, Non-GAAP XX%

quarter. increased in year direct effective operating last improved in of earnings year-over-year partially and in lower higher was up QX material increase and costs current offset in $X.XX expenses $XXX video the year. was higher current $X.XX, up and by due investments leverage. incentives a was by driven million from in growth employee-related rate the versus tax share operating acquisitions, million, was $XX non-GAAP year. strong EPS $X.XX last to inclusive both sales higher OpEx ago This driven pricing, our higher XX% compared the margins, higher GAAP to earnings per EPS GAAP prices, from in Non-GAAP year. strong The was by in year, $X.XX sales, and primarily

Turning capital, cash cash flow. up operating last up versus earnings was to and increase driven $XX taxes. improved by flow was in million. $XX $XX offset higher million, was year, and flow cash million The $XX QX cash higher primarily million, cash free flow year-over-year by working partially

of year, our to For driving increased consistent half. year the approximately higher in $X.X with is operating expected cash The flow. billion to continue expect the be cash with and working we flow full last of cash second capital flow earnings improved linearity

CapEx. of previously million includes of $XX tax share reorganization cash we this to payment million IP compared taxes as an Also, additional flow in $XX of in last million repurchases, year’s Capital to $XXX we relates a did that QX allocation XXXX. one-time million and highlighted, cash inclusive approximately dividends in included in $XXX cash that $XXX year, million

were by segment the was were costs, inclusive million. broker SI from year from actions higher lower XX% sales, versus year, spend sales and improved revenue $X in results. supply Operating up Currency quarter sales, semiconductors $XXX XX.X% to current in prior benefit earnings to improved the leverage. continuing the of through. up the flow were by in headwinds Products XX.X% year, of lower and and operating acquisitions million the from million availability In or segment, for Moving driven pricing driven and material last $XX

achievements PXX federal A California, system in and video California. order million upgrade million a healthcare $X fixed for Some expansion include system a customer customer, system a Kern for for order U.S. U.S. $XXX wins segment for and this device County, and large million customer. a order PXX PXX PXX device for $XX a notable U.S. a million County, million QX $XX $XX federal Ventura

earnings and including higher sales Revenue the XX% leverage, XX% and Operating and $XX Video. On year. operating XX.X% acquisitions million. segment headwinds improved In growth costs from offset $XXX up higher by in million, and the operating year from were were XX% FX partially in were last Software $XX versus XX%, quarter, acquisitions. XX.X%, last up margins revenue was Command million Services, up in growth was from Center in and

Some notable $XX $XX in-car customer. U.S. managed Virginia LMR agreement City largest a million services U.S. QX for and State service with Baltimore, order a an in video our Command $XX Latin $X million in services Police, America; million this agreement customer for agreement order million the LMR Maryland, ever, order million of a segment video which $XX a include and included another LMR a with federal a for renewal Center federal highlights

FX. three growth the growth XX% revenue $XXX Looking offset QX International North and at company, XX% in billion, revenue $X.X up was technologies. last QX in LMR year, America all was by driven results versus up million, for partially on regional strong Video, unfavorable by

up software Ending million technologies. ending QX the ESN up Airwave contract in to strong record exit. million driven Moving record by driven Products Software demand. Sequentially, by year-over-year record strong was of or was all strong a $XXX was for and in the $XXX $XXX backlog up $XX.X up sequentially, by was last up for and the backlog. QX orders offset million, and multiyear backlog by X% demand billion, $XXX three backlog segments. million Sequentially, and orders adjustment our services $XXX $XXX revenue was driven backlog partially up driven SI backlog and primarily America, driven by to year, year, segment, contracts million QX North or compared to recognition Services, the and In versus last in LMR demand by related segment. million, In both in XX%

Turning our next to outlook.

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

up million average approximately $XX.XX year up This $XX.XX full of of tax a are share guidance and revenue to to billion, million billion per from in $XX.XX share billion now again FX our assumes to we range rate headwinds, between weighted per to prior $X.XXX from of an non-GAAP the We $X.X per we For year, share XXX our effective and XX% the range prior expect XX%. $X.XXX earnings and of guidance. of EPS $X.XXX count $XX expect of and both revenue share. our shares full outlook $XX.XX increasing billion,

on back wanted I provide it Greg, turning topics. to financial color few to a some Before

First, an update Airwave. on the CMA and

CMA’s This ongoing our our position we’ve strongly the disagree strong the As this its remedies final with step and Earlier our not appeal on case. their decision. in issued August does previously, implementation regarding final decision the of stated change procedural next regarding CMA belief week, we order process effective X.

lower appeals the incorporated the accounting revenue for revenue X, year. amount increased of and an been will the from into completed. we the process Airwave our August and is perspective, price above defer fully control the However, This deferral guidance for earnings now resulting revenue year for the remainder remedies has from order beginning until

Second, Moody’s with of of two earlier profile, track maturity the balance rating improved our underscores our higher the strength from credit week, this balanced a strong cash debt from status, including BaaX position, BaaX. consistently sheet, flow. significantly credit upgraded and our liquidity pension along This growing record earnings

as highlights we year our of our second for business guidance finally, increased enter strength the the And the half.

by we current is our to customer remain demand. expect and environment, robust backlog driven supply backlog And exceptionally forward. on chain going Our strong, pipeline based strong

own semiconductors margin in in related full is the articulated coupled implied we expansion second these adjustments cost pricing year significant our approximately points. XXX guidance. implemented the of semiconductors lower basis portfolio driving that expected year are were increased the last Additionally, February, the in the our of half That in with to

call Greg. the turning now back I’m to

much. very you thank Jason,

operating exceptional segments, business. strong increased continued the we First, led highest revenue points, margins to expanded We year. results regions, and is a for which in We our both orders, has backlog and by both our XXX technologies. second we’re basis driving double-digits for three and guidance QX across grew ever seeing all record highlight our the ending achieved quarter, full QX the momentum in

Services customers. to we sell and Second, continue our base to value-add our to more Software global leverage installed

the growth Services XX% with up Software all revenue was During and in technologies. three strong quarter,

Rave largest in acquisition, demand together highlighted the our advances by achieved record Virginia across recognition made for license State ever we’ve also digital ecosystem, pipeline our orders We management. and center driving plate with our in significant that recent with automated is command products. order QX Police segment, our from video integration which Rave And in-car strong included evidence this

And opportunity technology intelligence. recognized seen for time color AI could it capabilities. both its our finally, potential spend continue and just AI a little the and back we And we’ve customers customers. business our to few on a see this ago Avigilon impact and when driving provide have and on some acquired I and wanted to our We artificial years

and video alerting can generative keep with when XXX happens help communities role along a plays from important redacting times, our something also analyzing lives solution enhancing AI important AI humans help assisting with improve an response automatically these to save call solutions while live safe evidence, live which those to involved. for translation privacy our to actively advancements in

With how organizations alike we’re expertise, AI deep and technologies will a for see enhance more public help proactive continue to very well-positioned approach and we adoption space, property, our from protect safety safety, to our and to enterprises, of expect ongoing investments people, increased this these private and solutions security. places. in and

the now open we’ll for Tim turn call and your it back I’ll to questions. up

Greg. Thanks,

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

now is for floor you. [Operator questions. The Instructions] Thank open

is Long Tim with from Barclays. first The question

is line open. Your now

Airwave. Thank despite impressive, numbers raising change Jason, Jason, pretty clarification, in the start one yes, Greg. you, the you. with for you’re I’ll accounting for

the have network you that expenses? clarify guys revenue was got you wanted pretty there guys to. think new just level mandated talk little that accounting I bit efficiently. to Just Can and a we you that are about run

just for business. should expense assume things kind if if change what to impact? about that you’re level could and great. comparable you little seeing side That’d but and government been something And type to you. be of customers is hit a have well, dollars flowing could everything’s from macro, a you the it of ARPA just talk Thank we Greg, So going on see like then on to running? pretty sounds bit what does the on EPS you’re into federal Or starting extent how the

Tim. Thanks,

wouldn’t about provide anticipate $XXX network expectations our year and significant run X effective million I revenue with level. from down this Airwave your from To the cost, So deferred August about last revenue service a for of now $XXX cost year. That’ll that be question for are revenues on million answer we Airwave. changes.

deliver they to run that services what cost the network Our and are are.

million were by still last about about year are time our the $XXX we this we and from in deferring million. guidance raising revenue So $XX together

and $XXX point, $XX the reduction required August in obviously X, to is And the million the through starting of the all Jason’s running of of $XXX to half to accounting back treatment million due million the year. that from the remainder year

As Airwave network on users of Tim expenses continue the and ago reliability, gave in we us and performance just months to feedback in a ever terms high as was end investment, way, by we’ve and the invest which achieved as Airwave. few

we continue on maintain behalf end to So invest we’re proud users. of of and that and our

demand refresh. about strong. last our device we last if I’ve best has it. as In talked terms year year, is of Jack due talk demand less than little today the ever we’ll as bit business level we good tell as the interestingly, want and Tim, mentioned could macro, Molloy to you drivers we high achieved about, orders of about to seen X% are The try believe were last And ARPA. track against year, and tagged orders a

Through less X% it’s believe than first half we this well. also the year, of as

around as thing is, So we’re helps, really best and nice tell, demand seeing control, but ARPA access could command public software this environmental safety, we video security, overall demand center, minimal. sure it’s drivers underpinning the services fairly and about that’s

a Greg. product increase year-over-year, to I $XXX The you from I’d that, had in and that, standpoint, highlighted with but million thing agree I’d backlog. a only benefits add from we S&S the a standpoint, think

Illinois for reflected backlog, In addition not of agreement Tim. of we’re a the in million for a frame to in period contract State that, for That’s services. XX-year receipt $XXX our and from a that’s incremental

that’s think their having resonate to I now. point really needs with just right customers So another for the proof conversations we’re

it. Appreciate much. very you Thank Okay.

Thanks, Tim.

from And our next Notter comes George Jefferies. from question

line Your is open.

margins I I ask much. wanted Hi very guys, to profitability. thanks guess about and

this expectation for for I lower those this year. think a I broker be what and of when that about about point level relief the fees curious the benefit when expedite wondering year then carrying down? you’re or do step would million that’s brokers at like. XXXX And one a fees do expedite $XX also if year look fees overall you were fees. guys and I’m back there? you for see looking event Would Thanks. guess still this I’m on And

George, Hi thanks for the question.

the related to began for $XX costs year brokers. through So lower an we million expectation premiums with of

trending bit We’re better than a that.

We’re first a on path year-over-year million to about $XX half. benefit the largely in

We’re some spending still investments brokers. on

year, benefit still million we chain look Again, brokers. supply the next we of elevated It’s remains $XX for the incrementally comparable strong but that As a year would same fluid. using level we expect The supplies tools remain about for level using environment the we’re over to sure from we’ve make better, of been times XXXX suppliers need. we is their lead commitment that still. into to our get but into

time PPV that seeing. the to use the we’re from secure match to record so And demand [ph] time parts to will we

say And as have under $XX that achieve thanks engineers would company engineers our Motorola And lot time for Molloy’s another million. million’s of than real I PPV in we $XX others. a and because way allowed in as – target. we been the Mottonen A that us they’ve to million, community want for – responsive well the in point, substitute how grateful to the goal Scott superstars. have of do all to next to we and higher because done our on matter and redesign are that and now leadership to little were have just be $XX to year also in we’ll a manage Jason’s Motorola, for customers. product months firm and be parts they They’ve allowed to that’s everybody adept engineering I a done And the know

$XXX still million then Is a fees And it. this caring that fees. Got expedite do if brokers right about for I think as you’re I math, just the in or year? annualized follow-up,

as little at more current look envelope by year’s is we that’s It’s going important $XX million, we envelope – thinking. year’s next be This Yes. that that. less our to a than reducing

through As costs, offsets materials are around always planning, supply there’s mix some we other direct that positive, some go the unfavorable. in

year, million So to a next see as fees. particularly to from this look $XX we related we broker benefit, opportunity

Great.

Appreciate much. very it. Thanks Okay.

George. Thanks,

We’ll next James. take our with question Adam Raymond from Tindle

Your line is open.

Okay. Thanks. to start Good afternoon. I wanted Airwave. just on

million through Just our U.S. a to documents trying clarification, read $XXX I competency here, these and but think admittedly, outside we’re all dollars. core in legal

up million then that go as $XX the So about the to the What try what our to absent XXXX number question think how scenario? I shaping case for came guess And we be just understand first in appeal? worst headwind? would to that secondly, with would you models

Yes.

of the first the That’s revenue end X is $XX So deferral remedies order, with the approximately consistent for which year. the August of date the all, is beginning million. the to of

do for are one-time step another recognize the the you that the network, that inflation math into how into that the of and revenue the a go of network, approximately well $XXX much go next as be – number go from on with contract. subscribe user it’d There the communities If servicing of variety other events as year the it down. we million would usage that Airwave, that inputs variables us

approximately $XXX year control All price those path the another next you million this $XXX can do $XXX to on math things for then million year million, together last decline. into on the and year

yes. year, the For full

year, the correct. full For

as is like Adam, I’d say process is I And what think expected. this proceeding

Jason gone and belief now accounting the today. till our in doesn’t way. the as and October. case, final as just implementation that they In did issued we be competition October order a appeal would change It it by tribunal to all to order, it was light this a They have that knew CMA followed at we late that QX, the our hearing, do knew by So could the of requires decision. statutorily, described. remedies confidence in treatment the The the yesterday appeals remedies

that done is well. as So part

wait they see will on appeal. to what we the Now rule

If But we’ve meantime, I’ve legal been said the an action and on how It said it very this in reduction have quantify think the through could be. is and already year We out, $XXX end see up else effectively basis full We nothing million would or and the approximately it what deferral next of consistent. contract. deferred revenue overreaching. agreed a binding as to opening we’ve of Airwave on changed, this unprecedented it plays be is year required another year. articulate we’ll

And or that $XXX line Okay. about a to $XXX think for on on that would million? million any that think approximately EBIT revenue, be way on to EBIT the that also us about

Yes, I this and haven’t the to structure changed. to network cost mentioned so run our needs Tim, as

So the as a lower revenue well. margin largely tracks amount a to lower

Got it.

Greg, the think Notably, obviously you in first rest growth operating well. Okay. sense. looking which mentioned, and is half. growth segment business for incredibly the margin the even as revenue half then XX%, that, first in for I’m is maybe at segment And XX% income I Makes PSI near running the that total absent XX% a of on over unprecedented

that the it’s So I through that of margin improved and business. the how question and a do been Thanks. thinking lot the the piece be trajectory know COVID you’re see that. piece trajectory how of on of other wonder structurally was maybe would you out guess a side all margin with it if you’re a I and business? profile whether coming I of that pandemic about

Jack, view last – on a into as the and all, I goods pricing year taken starting as you pricing say gross both sticky, the well we’ve transient. I’d this of that, know, Jason, We as margins, of compliment coming year. actions First those cost series and not on of actions team, improved again, as

So better. the margin profiles

we of growth LMR mid-single-digits, appropriate of to that for we’ve still guidance. full guided the terms technology, In and full the expect year be year

of in year. some monster first comps off the this coming half We’re

expansion or that, reflected way, that this million technology. I’m the in margins we’re the reduction and revenue be and half and accounting in LMR but about by deferral too be in And of the back my XXXX, our it it’s to treatment the margin margin expectations well. so in super grow operating gross would the of obviously year, Airwave is in while proud operating to said the would XXXX expansion Having $XX sitting August, as of early talk

first in pricing half it’s first last we half, the right, costs also terms our included our and first as half broker as well year’s products. increases. to of didn’t include important note off of expansion had That’s year’s in performance, you’re significant So highest margin own which last

the first to July half, records have up X second half step this second and last as growth in when function that’s of last through half. year. out in of year, effective our this higher we’ll we product have increases And margin our year. second you saw growth, increases or And So on come continued the margin really That’s good those when our we over year still significant price of of costs the from PPV implemented in significant look broker a the set. half

you. it. Thank Got

Thanks, Adam.

we’ll Ben from Research. to next And move Cleveland Bollin

Your open. line is

guys you healthy. I to the think and you being appreciate public the made sources question. that’s was trying think hoping environment of look comment interested you just evolving into sector about guide over how not I’m XXXX funding Thanks. XXXX, into but you taking I’m overall income public out – to get as And Greg, overall, you funding beyond. the you sector could how so I about the to and you

tell, you your Ben, underlying question. X% Well, the percentage best Then number are less. funding. in and to absent the one the about funding like the terms strong attributed volume order of is I demand ARPA we point, business I talked the, can orders of drivers The get to as or for thanks

and which is is the and Reduction local nature for absolutely in which team his Molloy Inflation the vertical and what multi-year of education, doing. of $XXX is thing billion prioritized The other an us Jack funding, are state like Act billion and I $XXX

record on orders other not that fact So the And had of backlog. had but track QX duration ending QX pipeline, XX-month and XXXX, backlog the we and we Molloy I record right? going improved print is thing and to and we’re guide the

the velocity? what’s And on that, they at are And Jack the we doing the conversion What’s and overall strong stuff when at favorable budgets, funnel? that’s terms and the order and well. in of too. the So look remain as pipeline health local in top? coming How and I of state

Thank of The orders, the think you, Greg. metric I when And the velocity there top bottom what important then those think say about would remains two. being is I quoting, pipeline is we the consistent. being of between our the and pipeline velocity most

In fact, it’s a number quoting. improved and seen growing we’ve of

think that I well to XXXX. So portends

I we people thing in and of think three all corporate lost we’ve from tax, beneficiary is personal other The about income government think you talked funding a for tax about the ARPA. funding, lot income when sales about think tax, inflation. government But those that when have streams been

costs that. think get their I of more necessarily in. people I they receipts understand wanted but haven’t lot And for So that, mention means parallel. to gone tax a them inflation necessarily in just And don’t

in, and the strong. think environment remains funding So all things very I government

That’s you see K-XX that. us then I through hoping was Jack, could take appreciate you helpful. I how developing. And

thoughts deal it nature helpful. just speak And the me. seeing, for If you that themselves, would that’s of any the you’re project of Thank the be you. sizes could to significance there the

is, school we acceleration Avigilon else. the over business lot school I market it larger the we’ve prioritized But some half is continues to that and video beneficiary Alta, EDU XX% school we’ve in robustly. really the cloud, growth on year, funding, an of general, think is the of this the K-XX It’s got security So, more very type is getting but that is secular two really continue into it’s surpassing that growing much it of buy also put and that of in our it’s think did of last year the is but which K-XX It seen security control. grow And that’s and education districts through well, Unity. our video Alta, level. depending to I much – more marker access K-XX And district, everything ARPA there’s and a first technologies. – around

One safety a with also thing is to add and we’re going integrating Orchestrate panic We a standpoint, Rave maybe along have integrations reimagine button. that now more with just from into to Rave. aware

detection. the We also weapons have integrate capacity to

weapons launched market. also school’s the detection for We

So with there push other come standpoint. – we a headwinds all, have the to story all tailwinds in coming whole security us from school

Mahesh. point, Good

Thanks, Ben.

We’ll take Cardoso from J.P. our question Morgan. with Joseph next

is light Your open.

Hey, question. good afternoon. Thanks for the

And in of a Just The back a at question. maybe is sort normal embeds broader kind just one of for me. God picture relative the seasonality era. this pre-COVID half, least to

given However, seeing handlings we ease half at puts – a that that. better seeing headwinds at back are have the you through much I the walk just same trends can around and staring now, just curious broadly, whatever just supply more you on kind through the guys particularly you and that as you’re or guess time go not sorry, supply takes us Thank you. backlog larger of thoughts why you’re seasonal seeing better

but will – Yes. dense. as business this you’re in that, QX I’m and I typically well, Normally, is remind right. jump and Jason Joseph, weighted you just seasonally sure QX

light unchanged. that’s elaborate guiding bottom, back remember, Jason the think I and top PCR But increase the Airwave business of million of another in we’re an change. half deferral and that. even model on in $XX $XX with million can

headwind to And informs $XXX $X.XX first the had tax headwind, still us back line the So and but of half EPS we that half for tax be have We structural to allows an $X.XX that’s year. raise. incremental incorporated into second $X.XX EPS the on bottom guide, needs revenue of million half. $X.XX growth headwind,

take strong. those or So is ingredients at as the into all distract is strong the strong, that and you momentum demand the is away it raise the shouldn’t incorporate blender,

low to the PCR the product, a model gone no in in we where margin the change we the model only we’ve recognized February, COGS. end business So longer mentioned and revenue in

neutral, way on was efforts. That our focus did business but change to the revenue higher OE line. a it’s So value

something… So that’s

we… choice, the And

and February working it’s in did we quite Choice well. out

and lead The us increased need, manufacturers thing us to they you as we the of based from business that. for on guide key can represent revenue out forward. and the to products the our backlog the the and plan we get I’d much semiconductor we go support for give how is the getting opportunity unlock commitments semiconductors continue we us commitments point other and But times from we them and

the it. Got all color Appreciate Yes. Thanks. there.

Joseph. you Thank

Next with Housum Northcoast Research. question comes from Keith

open. is line Your

your impressive the is this almost where Greg, the buck Can Good color afternoon I margins maybe software can for picture? at to brought of incremental margins guess kind question quarter. guide. services the clear us sitting we business of look as in? XX% like, guys and every and great some and those results and on help go margin is,

and the falls but we full the margins. for had that could decrement we margins year, X. requisite ago, in of slightly comparable for $XX said, million accounting you thanks That thought thought obviously to as the achieve maybe we full the in treatment for shooting previously SNS quarter comparable on light and QX Airwave year, the of performance thought we required that we August Jason were articulated. comparable operating I we great We question Well, on told Keith, the could have had S&S down, profitability a and starting we

I’ve and year-over-year margins expect down now on basis. an S&S operating So to be for operating deferral margin that we now accounting

to that. we is perspective. of ultimately appeal the Airwave see it’s guide year, to Tribunal disposition the have next And Competition and what to, from what’s of terms financial early decided Appeal too In a with for

little we on said, make That maybe platforming talk S&S, Mahesh to a synergies that. bit could and continue about improvements

seamlessly bit and integrated and little little sleeves and to more orchestration successful a a some doing working bit integration get the software efficiently. more We’re more

at Keith, opportunity, it premature quantify time. there’s be So but to this would

appreciate All I that. right,

platform… our Across

go ahead sorry, I’m Mahesh.

whether in So across synergies our or technology are platforms exercising that’s on-prem we of cloud stack. greater terms core

all are We a of focusing well, us. ease and really lot for delivery so install optimizing game good our that on some capabilities cloud of a to hopefully translates as of

rough a appeal? coming over next the to how provide you the year what’s Greg, then Got you. two? about the lose guys Thank out here you. you ruling timeline process, steps, and or And guess, plays next on this the appeals back assuming perhaps that Can I CMA

that appeal, by have end the QX. to Well, want I but be that we this, really all legal avenues our on exercise rules don’t available CAT would consistent, of then, get if of hypotheticals appeal us. will been said, the Keith, that, in into terms expectation it the we to on the

do. next the be don’t us the the would taking what of I the if be that So would Appeals. step us after to the they to UK rules know Court CAT the CAT after this against would timeline of And ruling. CAT,

to know is there would or happens decide. case. down to in the available of the up I have decide whether hear don’t actually the them they terms timeline window they What they have to that

on go on clarity and call. earnings a will more few months next more the this we you So hopefully give can

Great. Thank you.

Thanks, Keith.

move [Operator to next Instructions] We’ll Morgan Meta Stanley. from Marshall

Your line is open.

Thanks. Great.

Just couple me. a questions for

just product and a First, quarter peak in obviously maybe or be the guess, the sure result kind backlog of make orders? Or just to I APX really kind Thanks. is just as chain traction forward as that then into orders, of kind the of want is there? mid-market question. as this And seeing of clears the supply multi-year a second grow. first just NEXT we of on bringing anything for of adoption trends you’re mindful less I just continues there that terms should to a question, of strength

for inbound unlock as need. backlog expectations duration that continued we for the backlog strong and the That’s a to we backlog product remain of expectation orders, is can available for amount strong through with well that Our our componentry the function of it as the year. specifically of

And quarter new are strong a – of very related Meta, now orders. we APX had to we NEXT,

million received QX, close another it’s now it’s big hit just as of of half well. a starting $XX million we to when cities not terms APX orders, it look $XXX bringing but the into of complexion Tier And at cities, in the to In NEXT. those I X

So we’re that line. product really pleased with the of performance

Thanks. Great.

Thanks, Meta.

DiPalma Louie William with Our line comes Blair. next question of the from

open. line is Your

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

Louie, how are you?

Thank you. excellent. Doing

and of of and you As how older radio, for orders how had that to strongest the October be XX. still that platform APX were are the confidence NEXT back discussed Why refresh potentially now? has adopting from have the does this way introduced APX was even older it NEXT quarter how XX% LMR cycle any in ever customers your demand radio so LMR will full it new you relates for last a introduced device many upgrade APX instill in effect still decade the APX radio despite

So just a couple points.

mid-tier the to APX announce long The say XXXX. it’s it’s first of NEXT late until QX procurement one years. QX, cycle, did of not think We which government’s the which about is long cycle, is

of question, orders, in be of able seeing that’s striation was without what function point was a to the million the devices. time. really in that Louie, type those announced, on to quarter a of customers that byproduct buying So and the But the when actually at it are quoted new $XX acceleration numbers, what a we’re

other three piece long those scale versions takes speaking, down it, through here and So of years see it pretty to legacy post-launch years five large to refreshes, move the worked the to typically three having just start historically – alleviate cycle. probably device enough to and three

And as $XX committee The adoption orders a with on ability funding this approved from integration Rave VESTA the vertical status result Motorola? combination that Wireless has your And seems to enterprise education Rave’s of up is it the of has with next-generation generate the the of and XXX you accelerated of vertical? solution? juiced Have the bill. a what Great. And billion topic, Rave House

Absolutely.

with of sales. last along XXX – as now Rave we are bundling the VESTA, new we So our quarter, VESTA suite

as that a of part comes whole. it So

adding that important security from VESTA And bridge more those. integration we’re lanes with to enterprise we is Rave, of that addition that one remember, every been public to us In actively for integration safety. bridge we The an here. have more is just on definitely to do working – and

integration with button panic the mentioned I aware one. another being

We’re ties access as that integrating control video and Rave which into pieces with Orchestrate, the well. now in

Rave now Rave of more safety and into to well. actually And together instances CAD connect public different as together then effectively. aware us So allows plugs

communicate well. each can as with other instances dispatchers So

as So as by you security video the look enterprise at all install gets schools, in the schools we’re of safety install access bringing we that base and wider. have public bridge that this control, we have leveraging in that VESTA, between together K-XX that and at as with base you look

Mahesh. Thanks, for lastly And me, any the on do thoughts TETRA Great. have you cybersecurity vulnerabilities? reported

Sure.

is think There’s know for safety Etsy thing the there found first the primary reported, first the the What the was in think is what was no spokesman in critical late to custodian networks weaknesses TETRA general which is bit software actually to exploitation export operational a that patches algorithms findings, for those we there’s more there’s been in with algorithms. I Tier X, communications the standard to I’d control that. about But to little use. conjunction is no reported into I year out of. like subsequent It’s three we of issues. and public been So And authority point algorithms. essentially knew the thing to done that is even have in TEAX subsequent Europe. was open due last then been upgrades

did So this out done was actually actually who of testing. a paid, this tank Netherlands the research was the

– remediated then. had use, knew we and the was think been since primary it’s in general So yes, a about something we weakness I

Great.

been already. it’s So Thanks. resolved

Louie. Yes. In yes. Thanks, our view,

Thanks.

question-and-answer to and Brown, comments or the session. additional now will closing Chief remarks. Greg our Officer over This turn Mr. floor I Executive Chairman any for concludes

in of you partners it, Thanks, of worldwide to the and in our thank most we’re you worldwide. want of how do closing, the and just everybody. joining but sure I and Solutions proud channel Thanks and you do, I especially for employees all what execution. make all you, Motorola us, proud I’m the people

execution And Jack, we’re said the reinvention as and I’ve to exceed work Mahesh XXX done device work call, safety, refresh. there’s and video NEXT we’re I the Jason Mahesh the do in command with public what that strong. portfolio heard is on APX about I great a demand performing seen for that doing and all it. access like the Demand doing what and as that We is do, demand of also is lot around but great business center. control what strong talk doing and and we we what on done being security and there, well you from ever meet this It’s enterprise security.

the we’re engineering and while business and PPV margins, doing margins. in expanding And running operating redesign, improving real costs product expanding gross and supply lowering we’re chain doing that we’re and time incrementally

It’s the duration talked And talked velocity to excellent. the We the about we record end for Jason the backlog. be pipeline QX backlog with stronger. for the strong about have Jack We of of record backlog being QX of We about conversion. activity balance a expect talked orders. remainder the And year. and order that and

I’d talked we’ve been of acquisitions proud a little performing integration we acquisitions what just about last we strategically, two that’s we done things it referenced work The are And expected. the at say is and bit, those the really but also I’m organizationally Rave. or technically. made, above

We balance just got, upgrade. have strong sheet. We I the – a love we have

in excellent we a We in front I to talk you I you us. to opportunity few months. of allocation, in joining capital you. appreciate and disciplined again we’ll and think have continue us, be an Thank

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