MSI - Earnings call transcript Q3 2020 | Motorola Solutions, Inc.

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Operator

Good afternoon and thank you for holding. Welcome to the Motorola Solutions’ Third Quarter 2020 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 currently posted on the Motorola Solutions Investor Relations website.

of the will over conclusion replay three available the a after hours of addition, this be call approximately internet. In this call address website is The www.motorolasolutions.com/investors. mode. been At in participants time, have this a all listen-only placed [Operator Instructions] I now like Mr. to introduce would of Tim Relations. Yocum, Investor Vice President Mr. begin Yocum, you conference. your may

Tim Yocum

statement. to Sales; With be are made SEC. expectations CEO; it with along of differences those that, from Jack on Thank non-GAAP in you. & your XX-K, conference in non-GAAP We made and noted. the reference. be during Jason with results risks and of Software assumptions any portion this Vice of such Annual can comments the in Vice Actual and a turn Jack presentation news call, forward-looking could the and CFO; including and these Form and news earnings Information Greg. our call. I’ll over Winkler, Executive any join Executive to will are to the release found to Vice update Greg are undertake call, reports Products not third variety otherwise quarter based filings our A financial our that section number subject and And at and Executive current that during Kelly results, will during Good reconciliations for statements. today for XXXX XXXX the forward-looking Brown, cause These duty risk could call. in Molloy, statements uncertainties. release, President President this And Report of materials Kelly the Services. we’ll materially do to afternoon. on Q&A. other & in commentary, factors with Q&A our motorolasolutions.com/investor. earnings reference our Jason factors of results Welcome presentation statements posted during differ today’s GAAP Mark, earnings me about and We’ve unless and an These forward-looking outlook, Chairman and President review will of Greg and include

Greg Brown

Thanks, Jason results I’ll start Tim. before through few us good off our takes business thoughts joining by outlook. a the us for about overall QX thanks afternoon sharing and today. and

team First, our pleased I’m these proud of in I’m and times. execution with the and results challenging

we guidance services. During August and we the revenue driven security, the per growth video above quarter, in achieved earnings provided share in both center by command and software

mobile solutions leader and the Additionally, we video fixed portfolio by security generated $XXX in flow cash million operating and our for Pelco, of a strengthened Callyo, cloud-based of a closing law acquisitions SaaS enforcement. provider apps

Software Second, continues segment well. to our perform and Services

body-worn for both quarter. year-over-year. were business strong, our cameras saw of government areas of video million we history, in our the X%, software awarded significantly from were demand COVID Orders center fixed our with and half grew during improved over quarter, I’m the Sales the to up customers for generation next also revenue to customers environment saw plus to and of the points through the some over versus XXX returning the company. And largest outlook basis for expanded we I’ll take We now XXX encouraged in and call our QX. command the before certainly fluid, the During were and thoughts. the PCR margins order results improvements by multi-year final LMR safety segment turn earnings Jason while our public by operating you generated contract. $XXX many operating finally, remains

Jason Winkler

the compared in higher year-ago tax and and in OpEx non-GAAP gross million to earnings operating and was XX.X% Federal Non-GAAP Non-GAAP higher segment $X.XX XX.X% operating improved billion primarily due versus return by last the million, million change effective to from to included partially higher sales, $X.XX year, margins to offset partially in margin of contribution $X.XX down $XXX and to in sales sales recorded revenue and $XX EPS acquisitions. primarily improved SI a to year, the the operating results $XXX lower gross year-ago to operating of quarter. compared of offset operating versus operating in of quarter down rate lower quarter. share the $X.XX a per earnings Software the $XX driven XX.X% were operating discretionary including year in in lower spend Thank GAAP year $X.X you, The sales and higher down partially XX% to and QX down U.S. related from last of million sales margin a adjustment primarily by ago, the compared million gross due in segment Services. of QX leverage $XX Greg. million quarter. X% Products by provision leverage R&D Products third acquisitions. and XX% and and in due offset $XXX and QX favorable GAAP year-ago of Services. earnings margins in XX.X%, from costs was credits by incentives Software margins prior, SI

with acquisitions, primarily allocation million million to $XXX for flow The dividends, Turning free was flow million $XXX $XXX CapEx. for $XXX repurchases in cash year compared cash $XX prior lower QX in million flow. was due Capital cash million year to flow QX $XXX in sales. to of million and was with included million prior. $XXX million cash the share the $XXX cash operating in decrease compared and

million $XXX we credit million facility, debt the to subsequent repaid quarter, And the and quarter new repaid at $XXX with during million issuance refinanced end. $XXX during of quarter X.X%. Additionally, which million we was revolving of maturities rate our debt XX-year a upcoming against $XXX finally, a

repay expect the end. to by year We million $XXX remaining balance

down XX.X% and and lower segment down primarily of offset to a LMR XX% Systems or million sales Moving billion sales. due XXX in growth security. basis driven partially last to Integration results, by from video earnings safety, Operating were sales year, were $XXX decline in QX $X.X PCR public by Products points

for wins a order PXX notable achievements million the QX for with U.S. of $XX the a in state million $XX million segment order include PXX $XX PXX and Federal Wyoming, a a large Some to customer, a fixed state the large for $XX and customers saw growth customer in government sales we million video a international transportation Carolina, North TETRA during of strong order a quarter. order the

was software. and Moving driven $XXX points and improved last to the segment. of million million. Revenue our driven from year, X% by from in was last Software earnings margin gross both XX.X% Services by were leverage. million operating acquisitions services Revenue XXX in $XXX sales, quarter from Operating basis growth year or $XX up up sales, and higher

in in $XXX over $XX generation PXX as next million multi-year America wins an QX $XX the segment contract in-car Florida. Seminole service notable contract million XXX and and include multi-year multi-year services and a North Some body-worn County, video million a contract, with

closed for PremierOne Callyo, suite application Cloud received acquisition law and body-worn the orders cloud-based cameras, Additionally, we a mobile SaaS software launched our strong of provider for enforcement.

results. security revenue security regional LMR, public billion, down, public from International commercial grew America due to and partially continued challenges video in and professional at and while – in due and safety, software. was million revenue in X% declines X% services, America services, LMR growth COVID-XX. to and offset Sales partially public declined Europe safety Latin primarily North QX down by growth decline on software. $X.X was professional in $XXX video in QX offset radio, Looking by commercial radio

favorable growth Moving of billion million, and last recognition America America to the by backlog. contracts offset backlog currency to up North Airwave $XX $XXX compared North was year, driven of in in Ending currency and backlog revenue by million $XX ESN favorable rates. million Sequentially, was $XX.X $XXX growth partially on million, driven and down by rates.

due in backlog growth million the year, Airwave, Sequentially, $XX COVID-XX backlog compared backlog deployments by revenue recognition last down by last favorable rates. growth ESN million backlog million America X% driven $XX down or currency. delaying X% multi-year of and to North million international. was large and X% Software North and compared some XX% segment $XX million to due and contracts partially Services $XX on was $XXX currency primarily $XXX due engagements. of sales up was to SI primarily up Products Sequentially favorable and in or to was or America, or million agreements to year offset international

outlook. Turning our to

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

now X% For the full guidance guidance be our year, EPS of we between non-GAAP and X.X%, up to approximately with up now by improvements like our higher decline approximately our from sales over outlook for to $X.XX $X.XX $X.XX, billion, $X.XX, to in up from capital. a I and turn of working prior $X.XX expect prior down operating would guidance, is flow call $XX previous the now and Greg. earnings driven back cash to million from our

Greg Brown

end few a Jason. Thanks, thoughts. me just And with let

First, with in I’m progress business. making pleased very command our center we’re the software

command XXX Our covers $XXX transitioning profitability It’s its business, million which the consistently closure entire to and mission suite been from while software has a intake workflow towards improving now center and model. management. case also the growing SaaS

records fully month, mobile functional we which Cloud. Government suite, on and the this announced PremierOne and solutions Just Azure Cloud CAD, secure includes our available

those software we So, on-prem command deployment. their the have of customers featured or now operations. Currently, either more our of customers deploying we suite. a the growth this new of software demonstrating orders over customers X,XXX fully XXX the continued means QX, embrace customers this software, or components integrated with in run can center of provide flexibility our their cloud suite, further In two were as into expanding using half from to opportunity over

In software. increasingly benefits as for for demand increased cloud-based LMR networks that across workflow. not command our are entire seeing just the in their Second, ACC over provide or we’ve cloud to remote the our launched center radio CirrusCentral offerings solutions land security, core services, video for of the cloud PXX we’re In for evidence digital seeing launched radio, is mobile Customers well includes cloud-based X.x customers. connected management that our sites and offering software, cloud. has the body-worn Avigilon cloud backup video-as-a-service options which management cameras X,XXX a now as we

our people’s resilience to of increased on through and is around solutions customers nothing our on our support All we of provide our and for And of civil rely the depend finally, in was of offerings teams have, to the customers what unrest, and us our pandemic, nothing and to remarkable. world demonstrating provide short opportunities recurring continue as customers capabilities grow and revenues. subscription-based disasters the need natural to criticality and global these

world’s were sixth country. the just highest the the sustainably Wall companies most in we as Journal Additionally, managed of one recently Street recognized ranking by the

it turn on continue return. move our supporting to deploying Tim, the also while we back people drive And you. both we our continued to will As with to that, and forward, I’ll shareholder capital and focus customers growth

Tim Yocum

Greg. Thanks,

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

Operator

[Operator go Instructions] Badri question Sami of first today is from ahead. Credit Suisse. Please The

Sami Badri

popular XQ. you of in maybe in two about first contract highest to the guys $XXX Hi, company’s over results on congrats to pieces like was be an recognized going question? maybe, of you in could that long-term? demand I solid and this at this. magnitude, that that first time, could that there. How future, and the wanted know XXX same the type thank kind the idea the million ask us on signed to the will the medium history, be in but to like you in large the probably And deals give not be potentially then little how of there’s specific probably deal I bit this a similar

Kelly Mark

Kelly. Sure. it’s hey, Sami,

think things NGCS, the three I would about say on So, I it.

that that is XXX EazzyNet referenced could video, entry look, I highway pictures, calls, the before. off, multi-lane call, text, excited XXX point prior creates of handle really what think part highway can is to the centers, of handle effectively they on all versus about entry It voice and may that have audio, I they now single-lane where does the point the for First we’re a business. as

a have when our say that get like of I’d the the similar it, and longer that’s we system an you other a component tale deal contract. what multi-year we’ll thing to similar about upfront. And second deals and this that’s installation in as this NGCS. There’s The think customers there’s is about service, here run then always for on where will

NGCS, acting third is remind The some I’d just around componentry thing software of own – have and about integrator. you in as we systems it, we are while a our also

think different the software call-taking for our an in game, looking would we a software the around excited software, about solution. are But I early So, we’re other we we’re nine than in our entirety the which NGCS this. it, are, a I – conversion we’re and the is XXX bit reselling is that offering you’re what of we effect, the across at the third think somewhere entire the and second components where in or CAD We call if EazzyNet States. or maybe, backhaul inning, solution, United as inning baseball of do EazzyNet so

there, So, certainly there’s to and come. update those you fight deals other those as just and out we’ll on for continue they

Greg Brown

be And long-term this contract. over rev-recognized Sami, multi-year, will $XXX contract, million a plus,

Sami Badri

may Got have EPS you’d have revenue billion around just the guideposts still $X Greg, $XX and out you. an this little give XXXX, you. what’s around it. thinking this a We Thank the was or this should a one in us laid for update then And how be hoping shifted – little for EVP long-term. to we COVID question about of guidepost obviously, medium and but to framework of bit, bit come I on

Greg Brown

Yes. of year, the how Sami, Well, say talked improve business the being We is but is would about I was of disrupter, point. obviously the a QX I’m with would low ultimate QX. this in pleased We momentum performing. COVID

expect We in QX. improve to

would quarter All going think to I’m say for some that not I guide this reflects improvement. I the print of XXXX. look,

would expect premature. we don’t today return say I think and But here I sit us would I a to to overall I that crystal would ball, us grow to year. for you expect be update a I again, next quarter would have and as in and the also on from grow year, we’ll next now segments call. growth both revenue earnings but next

Sami Badri

you. Thank it. Appreciate

Greg Brown

Sami. Thanks,

Operator

Jeffries. George ahead. is question next Please from of Our Notter go

George Notter

thanks Greg, very of comments, on guys. Hi, interested the was I some software much. business. your really in

rate revenue in licenses or you that little $XXX more about you some talk getting us as that can from million Can how maybe, customers mentioned perpetual rate about to customers move that a think run bit – and imagine run you that subscription, is this a mixture a to I converting more rate, cannibalized at would on to are you that point. I run talk that software the transition. subscription, about or anything insight give can cannibalization you of potential talk degree Thanks.

Kelly Mark

Sure, George.

will Andrew job, revenue left today of license suite. is Kelly is have good which The first done half XXXX. the Cloud-enable be majority the the a software revenue. component and to done So, the Cloud-enabling of in only Records,

single both clients as-a-service. transition. moving Services, continue and transitioning that this Said total in that expect even be we’re I I incrementally still as digits to Software perform multiyear and we’re in Software again, segment XXXX So, But more high more to any those and to or gradually view in more will license customers you to a manage disruption to year as without that and see top-line and a service another well, the dislocation the segments, transition perpetual major Services Software to think grow to of revenues. and as as-a-service. able I while in sub going from Services we’re incrementally way,

Greg Brown

and And as-a-service, add CAD, we acquisition of cloud-enabled only thing George, Kelly to now our And recognition The be already excited the next very the about call our what up addition that Callyo, a the of in half the what center which That large that, part base XXX year. the addition suite to only to in of records, do we Aware, really as might of first with is application, taking. just we’re are using we well. just is also, customer just that command license – did, plate we the have mobile in excited about folks that cloud-enables as-a-service mobile. an vast picks of which portfolio the is of we’re part also announced, did portfolio. yet Kodiak entirety we happen in what our won’t That’s should is our software part the fully and which I

George Notter

Got it.

but housekeeping the the And us item. there you tell impact see just line what in can Okay. on then top press an Thanks. quarter or presentation, one the quick and was? it was release in didn’t I that FX

Greg Brown

It small. was pretty

George Notter

Okay.

Operator

is today ahead. Northcoast question Please from Housum next go Our Keith of Research.

Keith Housum

the hoping quarter? customers. the guys. that shed over the quarter How sales develop is of terms quarter, could this was about in quarter, morning, a was third that see heard light ability I getting think Good I going on do terms the fourth and to you a in challenges into to last what in would challenge of we

Jack Molloy

it’s Keith, Hey, afternoon. Yes. Jack. Sure. Good

customers of of around we kind our engaging geographic world. terms to the just ability the So, sequential in improvement to you and give saw

Europe, are government, increase First it’s point Kelly increase revenue. of government, saw enterprise in of as person in In ability been and pointed and LMR of meet Europe the see, starting command America, customers XX% in and actually in of in and all, in manifest important certainly out, seen us proposals But of with come, and engage in we’ve revenue extend we to terms and recurring North the that business both is our video. our out to terms we customers virtually. market in to in able QX, we’ve center to sequential our and

an improvement. So, that’s been

said person in masked our having pull to essentially improved, safety, really I much demonstrations. with customers But been engage engage virtual Latin of very shows government; cetera. customers Asia-Pac, et we area thing. and of in them lockdown, resilience diminished be public it’s lockdown the proud trade team the we’ve where up, our of really same certainly particularly, along. of And America. the in one in is The I expectations heavy continues been of world, would we’re and got say terms of in to terms We’ve use and videoconferencing and as trying

Greg Brown

completed few did Keith, multiday ago, literally ago. Summit in few days just a one anecdote year double a We we We team, And engagement Annual I’d was just other days ago. is you attendance it a give Software Kelly’s just completed just and virtual the just the person virtually.

I think ago. that good were a It engagement, internationally, So, navigate to quarter been theaters but digital and business referenced the we’ve Jack continuity. in team our Molloy’s transitioning on frankly, quite engagement, we and than customers able virtual better Kelly’s depends been much team, doing have

Keith Housum

follow-up Got you. a there. And just Appreciate that.

In terms latest the you in LTE on LMR the around in and like of us terms of of changing of where gears versus actually, FirstNet give can Airwave, terms kind world? stands

Greg Brown

I think the change it last spoke to mission mobile America complimentary we XG to transitions to and a ultimately, the from land high-level answer North is here no as in or you. critical XG, LTE time radio. technology is XG

think land particularly and in the on awards and through local awards state Winkler that of need mobile and criticality I the state upgrades, have reinforce dimensions radio. to reference went

I I an if largely net relates good LMR positive. and the will command the and overall, say LTE, are it business speeds remain As the think Airwave in quite for good get frankly, think or XG to timing security expectation by substitute are that a extension. we think believe have want and the in We to in coexist, Airwave, we same that that video the UK faster and upgrade our center, But LMR, for that you customer active domestically be we But – thing. dictated contract and again, do it’s another with will discussions customer.

Keith Housum

you. thank Great.

Greg Brown

you. Thank

Operator

question is Adam Raymond from Tindle with next ahead. James. Please Our go

Adam Tindle

little on to been and been of Good biggest cities. two tale the drag performance, a afternoon. Products Between margins. just probably, two SI, forward. on In but Thanks. overall with opportunity moving I wanted question the a segments, Okay. the it’s that’s Greg, start

from this $X past. the to walk just through Are and revenue of above So, there XX% some moving range to standpoint need parts hoping Does back that? just can years a maybe, of the an to kind opex segment you to timing you to things operating margin XX% back can get from do get billion?

Greg Brown

Adam. Yes,

let’s a – of overall. taking take kind at look So, OpEx

this business full out about we’ll remove year-over-year. of this of the million OpEx year For year, $XXX

$XXX If million reduction. that you include a to acquisitions, net net it’s

quickly good structure, ago. adapt I both a of got environment think we did hit has a and with the on and couple So, to variable, the expense quarters structural team moved job to COVID

time, incentive approximately full So, year decline. sit next of told the the expect being think to year, refine million improve though for form top-line can $XXX compensation. Services the still margins of all with with the OpEx margins cost look million, a operating in, being with we XXXX be this that’s for segments, expect we But Operating product next of net year, $XXX kind OpEx improve Software given about of that to declines what see of this if down year million today, XX%. the we two in segment year-over-year, returns that about we And we’ll operating last year, and as composite the of I view. consistent margins even volume that’s returns obviously or Obviously, further $XXX volume. structure. always to here you

Adam Tindle

a And top-line I’d imagine that be from to a maybe, follow-up, the big of drivers PCR is in the Okay. going business. one as standpoint, segment just

maybe, potentially opportunity you rebounds? so about could XQ, us that XXXX business think that into If fits just forward kind and as it moving on into of can today, the where we update just

Greg Brown

Yes.

in noting North might sold North It theater is with which better QX is oil in incrementally clearly that think better, – growth and that environment, channel in you we and in what also improve expectations primarily, inventory And that gas, QX. hit our frankly, to form it segment product to critical informs even slammed part quite an represents to and expect hospitality, the that’s the for into and the performed guidance. a as as PCR largest down. by return little has worth most: America little I to in America, informed our that’s think know, PCR our growth been It’s expect some has gotten return was overall bit bit been well. COVID through a XXXX. this low it transportation, that the of QX I to primarily extreme point have be we PCR, industries entertainment, in channels.

another that’s potential So a good indicator of time as improvement goes good print – terms for continue to us on. foundation in to that’s

Jack Molloy

one maybe, Greg. other And thing,

at on product as in even for refresh equates Just some slate product well. historically XXXX new times, have the look PCR, introduction, as growth, we to we and challenging do

Adam Tindle

it. Got Thanks, Thanks, Jack. Greg.

Operator

Our next of Tim ahead. question is from Long go Barclays. Please

Tim Long

Thank state here. two note a there, could first, little state business? any changes? a little secondly, level if talk and about customers, bit much of could budgeting, side? if anything any talk of given bit with you. and Thank Yes, mentioned just then Greg, level to I across of And local is your good of little just you you. government video maybe the us a video You high the color getting the kind give macro are ramping and there, on video that seeing stimulus and you cross-selling bit more traction maybe, the that how there,

Greg Brown

Tim. Sure,

international acquisition video the Quite another a and as through job frankly, good Edesix. WatchGuard. a with body-worn an which We demand the there impetus on reverse start you is take demand we growth suspect, specifically, Just a quarter doing the form let’s made Really, of came for part behind in we’ve acquisition had them I of order, obvious WatchGuard good video. the are Molloy would the the John of and performance, Kedzierski with to called but driver in reasons think strongest video out body-worn lot had. team also

I performance like the increased also, demand. So, there our and like I

video We solid growth. have to also growth did strong double-digit fixed in government,

being always By very of the that I that on state to fixed a acquisition we’ve longer further that local – a with said Pelco think the the that government government good the given were fed of purchases performance a sales came move video benefit in clearances to fed, into contractual cycle and reflection to but government. is lot that beneficial. way, in right as us fact well, allowed and

In and it. local Jack customers, terms of mentioned state

of times. during a our way engage Many to challenging I think in found have that them good customers meet do these person.

largely digitally remember, state have also virtually. local set. and meet or We been And budgets the

thing moves So been well think that CARES impact feds, as of that’s into money Act has and good beneficiaries year. favorable that I also the the next a We’ve well. had a from us

don’t add and Jack, I state if anything the know, you want budgets on to local beyond So that?

Jack Molloy

I No, prioritization, prioritization. just think prioritization, it’s Tim,

in have As you’ve the mention to heard a business in of of we’re to business emergency not the in terms of need me have, a nice response. before, we’re

to our So drive continue really, see projects we customers through.

other thing losses, just getting that things of multitude taxes, which special sometimes sources. The but Act, like is, funding purpose I also think different there’s are talked passed. CARES option local a still about Greg there’s

to security And so we to government remain now, our happening highly we the engaged I our what’s means a as know see and across government. world with the and great right think deal portfolio federal customers. We great in demand with to cities, states, and

what we follow, encouraged see. to more with but So we’re

Tim Long

you Okay. very much. Thank

Greg Brown

Tim. Thanks,

Operator

Paul Company. go ahead. is The next of from and Silverstein Please question Cowen

Paul Silverstein

I recurring your overall somebody Greg, that company? I business recurring. mention What heard revenue for is think, the XX% is

Greg Brown

revenue that reference because the Molloy’s No, I European was think contract. of Airwave the is our majority recurring, largely of

Paul Silverstein

My fault.

Greg Brown

at Software as overall, so a that’s I largely year, year as of full and view Paul, recurring. you good. look than Services guess, for Software XXXX, No, but and proxy we we byproduct a Services, will be this This higher which the favorable view that’s all in year, if right, which XX% year, for

Paul Silverstein

a Then follow-up. as

know just On off us, can be big big it quantification I coming year selling out the next government’s a this terms ago, any year, next that to how how but – how of year? and piece you big you ballpark of started will year, this over in can provide video, year, be looking business

Greg Brown

the of have, plate Paul, is $XXX – you assets, million, be domestically all take software, Well, all-in this that business, if hardware, year. to so internationally, kind this fixed, recognition, just license and body-worn, about likely to we of in-car, for video for assets

us the about talk Xx That market which control we achieve. we Xx access growing You’ve the the can believe market. around heard it still is video piece, and fixed

their worldwide, the indigenous market. video billion actually $XX addressable the $XX take market, billion out, always – largest the market this zero given size competitors, about have. addressable we It’s you is all-in, If an $XX to business, billion and we China of

the to think our well. room along I with devices here accumulated developing So, assets that and we’ve analytics there’s with as run intelligent the team edge is

Paul Silverstein

Greg, focused was piece you ago. actually back appreciate that year about government entered the a I I on that. market

Kelly Mark

I he’s hey, Paul. think –

fixed right governments, state of bookings strong video market million It’s and come mentioned local, nine would said growing success of double-digits had as feds of government, we sales had substantially we also, the all in businesses came So, three video and maybe really, the that how strong WatchGuard success the both dollar the and the the government body-worn in acquisition, security at double-digits think probably and talked we’ve $XXX you, video into Greg I those but ago, up some vis-à-vis, an in things. was that’s an business? in big asked, well in probably aggregation ago, highlighted there. about terms are had fixed we through it question is acquisition. remnants The now. hey, and I both approximately your are we the that’s also calls tell unit into Edesix of QX, we mentioned, had Both the of video the months mobile And as two as time,

hopefully, So that helps.

Paul Silverstein

I appreciate Thank that. you.

Greg Brown

you, Paul. Thank

Operator

go will ahead. from Najam come question next of MKM. Fahad Our Please

Fahad Najam

and your light big are question. tend driven and the more are of they Are of XXX on we question. be decision-making by my Are that’s kind you want Next customers an center move driven to video? to In ask picture your it’s point to very solutions government slow Thanks to trend going going view I to usually, and or tend customers customers’ by not slower. maximizing enterprises it for in whether government – inflection new when like that forward? profits, you government command taking Greg, any be profits comes of noticing a most to accelerate a your beginning Gen

Greg Brown

Gen trend. is favorable mean, in command this. the opportunity obviously and us, that’s I a a I would for say Next software, center XXX new

technology legacy has and I’d cycles The years, had plus. in workflow processes other of software, years the over XX some of literally say, thing several XX, command oldest center terms historically is decision

in to has been that customers part prefer So, particularly positive and center I the pandemic they’d inflection – software, I this around cloud. command think accelerant decision-making state prefer that Traditionally confer they’d decisions around to on-prem. control, point local the actually and accelerating cloud. a think that’s COVID-induced is actually would

this an literally additional and been needed have civil suite North are of tens place of instead America upgrade of thousands systems to are different unrest communities the pandemic law The to to the that with ages. contracts I because a can different get enforcement has along nothing, think accelerant the On upgraded built older some systems encryption has radio, better. and in process here can an modules and and in at then Andrew’s digital different state-of-the-art that for to that the in tenant lengths you team all protect to trying be the land an forklift local mobile components and or anchor accelerant be module those decide Kelly suite. decision-making and we an to and also

I think the in make his as just built as devices, two APX announced, MPXXXX TETRA, to have our and team refresh opportunities well. and decisions NEXT, those that’s to new represent for Molloy events customers

Kelly Mark

well. it hit really you Greg,

And the a Those thing forward to a be but expectations of will number command catching extract, the our government for mobile Devices say years in of public for That’s us the that that in frankly, enterprise is we accelerants lens information environment? think and in certainly it. that. compelling Greg I do with those moving safety. are nailed up do think – seen, we’ve you an space I under overused a the ecosystem other how disseminate how for have customers. you I work term, center, that that

Fahad Najam

Thanks.

the I case, a mission wanted digital touched radio? You that creating the follow-up opportunity? that’s upon that as infrastructure you and control are to command can your opportunity in to is ask, Gen customers a resulting talk to that quantify applications beginning piece like that Next you which new platforms, is, push migrate to critical And and if see features on government

Kelly Mark

center it’s the say, not multimedia. today at would I officers with it offers it’s up enrich up type And opportunities the to mission Kelly. the whole in offering part the a opportunity talk, it is images, video, command mobile can of those provides. of the They that receive device regards that to carry But push data the now workflow its to uniqueness radio critical with workflow This receive communication before. is in as from and them. couldn’t instrumental edge, but that the they of its

enriching information entire to enabling at we’re with from center So about command lives. that much all end. used day-to-day can very the management that now to workflow critical push talk in mission the it’s it’s record that dealing so workflow information intake It’s as operational not case that with today to our mission-critical manage much call across XXX so about as they in the

Fahad Najam

which trying and as was is I software in on little a I that you your rephrase new bit to the to simpler, talk. a critical get a more result beginning question, at mission If push of of are wasn’t refresh devices control honing to was particularly business see upgrade I you’re in command my can now What selling? the

Kelly Mark

Yes, we are.

last built NEXT we of million funnel We’ve the device. announced that. October of $XXX in already for So, terms north opportunities APX

very at top the devices Remember, end. we encouraged. introduced We’re

see So capabilities ability which as how to LTE those of talk, and built is communicate, we in get start it’s to safety bring to reach to truly devices. for of because PXX up the purpose only demand push those we’ll but kinds communications, XXXX, as announced great devices just encouraged We brings we bedrock broaden for public the booked week, and states not and this for cities out Greg well. back really Europe, of we’re this things, about do and a that. different year the talked in collaborative a so those that about TETRA essentially on market the it excited year, the device so number about, fly for of we’re through programming things, those

that in see of for aggregating, more as we really and I for intelligence disseminating, terms within ecosystem. customers need a can earlier said our do their devices So,

Fahad Najam

Thank answers. you. the Appreciate

Greg Brown

you. Thank

Operator

Citi. from of question Jim Our Suva is next Instructions] [Operator Please go ahead.

Josh Kehoe

be Hi, or is color Thank headwinds when Thanks to taking for it And is facing more this provide safety in LMR due is Can public largely on you you. there Josh to through Kehoe on COVID-XX any more the expect you’re business questions. for them? to the Suva. our it? you and Jim

Greg Brown

hit the the and reason back The that and That’s that’s us think I industries pushed it the March were I by push were around changed deployments, at the we the all. right still public for engagement the right. right. largely to PCR affected headwinds when and sales don’t in safety push primary talked the COVID about to think LMR, quote-unquote, to being

which both primarily drive why well, expect next return of but product PCR, Act referenced will Although to say. beneficiaries would to I budget our Molloy it improve safety safety I – will been performed tell its year. we growth And which LMR QX, in think than we’ve LMR that again you, expectations it referenced, and I will CARES guide. public our and I think public improve, informs as sources I QX, still what performed There’s a The the the that’s in segment expect to of better earlier, as we lot

Jack Molloy

and of just deployment piggyback that in the been Middle systems onto challenged America. in Africa Yes, Greg’s the physical the issue only thing and one comments Latin with there, is East we’ve actually I’d

really to theaters. go we’re impaired that’s our ability So, elongated revenues to those anything, and completely in do recognize

Josh Kehoe

repurchases? we are as about XXXX, as thinking And you prioritizing M&A into you. follow-up, a Okay. how look Thank versus share

Greg Brown

flow allocation opportunities us. that acquisitions XX% depending XX% upon of share front are It’s of capital and repurchase. is XX% cash our available that is framework XX-XX-XX. being or fungible dividend, for in the think a either is I amount, the CapEx.

not but in in loosely, stock these framework. seen And framework, were the are the these active that evaluate opportunities buying on you’ve meant as the QX. a think done we’ll levels software as shares We buy QX. tuck-in to acquisitions We’ve is prescription, attractive side, come. that in back a it’s to it’s at video levels, on they So be We side.

way. that the capital next part, at what year, thinking to I in acquisitions point. in regards come it of think our this a reflection will deployment that’s around the of opportunities be, But

Josh Kehoe

you. Thank

Greg Brown

Thanks, Josh.

Operator

floor or remarks. closing concludes to over I question-and-answer This back Investor now Relations, Vice our turn President additional Tim session. any for Mr. the Yocum, of will

Tim Yocum

a your for participation Ladies please Thanks comments. Operator and and disconnect this in teleconference. time. The of for thank three conclude today. hours. at available replay this your this us be the address internet you No ask lines website does www.motorolasolutions.com/investor. that additional is over gentlemen, will today’s approximately joining We call And you

Motorola Solutions (MSI) 29 Oct 202020 Q3 Earnings call transcript