MSI - Earnings call transcript Q4 2021 | Motorola Solutions, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon, and thank you for holding. Welcome to the Motorola Solutions Fourth Quarter 2021 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 X available the a after hours of addition, this be call approximately Internet. In the call address website is The www.motorolasolutions.com/investor. [Operator Instructions]. Mr. now to would introduce I like Tim Yocum, of Vice Investor President Relations. Mr. conference. your begin may you Yocum,

Tim Yocum

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

Gregory Brown

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

First, last during deliver our to critical the particular, supply performance day. the ability chain operating in end the on for a our million per navigate higher our $XXX with the to ended at every earnings our $XX.X customers the revenue year and billion of current solutions of guidance backlog I'm during guidance, versus with year. very record share quarter cash environment We $X.X rely year, full and quarter generated of above billion, up pleased our and, the that the record flow and achieved XX%

software full Second, and ability durability our services. value-add results base year our to leverage installed and the sell highlight our more large business our to strength of exemplify and

XX%, segment For company. XX% total by the the XX% grew the margins Software sales for year, basis accounted for Services XXX expanded operating of of and operating points earnings total and and

in the for and now the our revenue chain you some approximately Additionally, despite for to in growth take finally, demand to category technologies over XX% revenue resulted point, software, was security this continued looking thoughts. record segment, revenue, informing year to year. for are with backlog before in the challenges. returning and in led control $XXX X I'll earnings segments in our growth this strong our of turn results another double up all digits both year, and expectations and At call ongoing final video the And cash growth, of ahead and supply for which outlook flow through fluid Jason access by million that

Jason Winkler

Greg. you, Thank

to margins margins operating margin earnings of the $X.X was Software Integration year and XX.X% due segment, XX% QX million was per in favorable leverage XXX lower of operating and employee acquisitions, leverage of by, Our $X.XX Services, due operating earnings within $X million year from Products basis compensation $XX $XX and higher and per operating last million, year prior and Non-GAAP partially compensation to in Non-GAAP $X.XX XX.X% XX earnings primarily currency. $XXX sales incentive of included of million. earnings up to Products Systems in and $X.XX to The share segment. $XXX Services And for with acquisitions. up GAAP from in share $X million versus to and acquisitions $XXX Operating ago non-GAAP $X.XX points XX.X%, higher and and ago Software down billion, compared points offset the tax operating versus results down lower basis year, to of in GAAP compared the operating last million, revenue compared million offset OpEx by the improved including and higher quarter. QX up and quarter. improved effective X%, with due rate higher incentives higher sales Integration acquisitions. in QX Systems expenses along the sales related higher sales. was to and OpEx expenses, operating employee in operating XX.X% year. incentive of

in XX.X% rate. X the up of driven impact all XX.X% was growth operating the sales and improved The margins non-GAAP of $XXX in year. $XXX higher GAAP earnings was and For incentive segments profitability by compensation $X.XX primarily improved XX% XXXX million. XX%, sales, on operating higher and by Revenue reorganization operating sales, to full in favorable year offset prior charges Non-GAAP higher $XXX operating XXXX, across sales compared per year. operating was were sales, driven lower by the the XX.X% tax were and from $X.XX current $X.XX, leverage. earnings driven XX.X% employee prior in year, FX prior $X.X was of income Non-GAAP earnings, from million $X.X billion, operating up which higher in increase other during leverage. acquisitions in versus higher up was sales partially the was $X.XX million sales And increase year. in per higher of the includes with This of by higher or share $XXX other income, XXXX. revenue leverage, technologies. earnings billion earnings year, up from earned were the higher a and GAAP in billion, was higher million improved $X.X both also share

including primarily last And the For XX% employee expense benefits million and year. comp billion, the benefits year stock of the by full higher year, compensation prior XXXX prior effective $XXX items, $X.X on booked was year, acquisitions. tax the compared higher XX% rate up from OpEx for to in in was versus incentive driven the discrete

billion dividends of record year. $XXX XXXX in Turning share $X.X was $XXX.XX, versus $X.X earnings billion flow $XXX sales, $XXX year. in $XXX to in free $X.X billion $XXX cash cash average and prior versus the increase a to of for repurchases in price driven the a compared million million, cash operating full prior million flow at for by cash cash taxes. QX higher included higher acquisitions. the in record prior an Capital billion and flow. by The higher $X.X million And offset year, flow the allocation for year, versus $XXX million was cash partially free flow and was year. the cash And was OCF prior million flat was

EBITDA issued $XXX debt, a of of upsized facility we billion only million Additionally, ratio during into debt, of a long-term outstanding the adjusted million revolving and and $XXX $X.XX with debt $X.X entered to year, of net credit billion ended redeemed the new X.X. new year cash

we We a also consecutive to announced our and year our $X XXth increase, second billion increase increased share program XX%, the repurchase quarter. a dividend double-digit in our of

by X%, impacted the on billion, a million. decline driven the last was and constraints acquisitions by Moving $X PCR. and QX were results. or down was we the million from sales, And in prior higher segment from lower Integration the in in to sales were by incentive year, $XXX Growth which and employee earnings XX.X% call. compensation our revenue public video XX% sales. safety of System discussed was Products LMR Operating quarter in supply security $X.X offset down

for higher orders America, APX Some million for notable this achievements wins PXX a North segment PXX for $XX and a a Commonwealth device by $XX $XX upgrade million and of $XXX device sales, the sales, Massachusetts, of from $XX of was acquisitions full upgrade sales customer the Asia for million earnings or device QX NEXT prior in for TETRA year in the include a the of offset X% large the security. for Columbia, on of billion, million XX% was U.S. large $XX year, higher $XX driven $XX Revenue customer, And from Pacific. order North revenue up higher fixed million year, order and by German District from in the upgrade up XX.X% LMR higher customer, $X a MOD from million PXX OpEx. a were million. sales prior America partially a TETRA a in a security utility $XX video upgrade video million of additional Operating million

higher from and improved our $XXX software. last year, the in was points driven earnings last or was Services up revenue million. by basis million in up from QX by sales services, segment. Revenue $X of Software year, and next million, center to software acquisitions video quarter command from LMR XX.X% were leverage. Moving XXX $XXX sales, growth and X% driven security Operating

Carolina order multiyear French Public hybrid $XX camera $XX a contract this multiyear with segment million software Authority additional $XX for PXX PXX we upgrade and $XX County, million California, North a service growth in County, wins software cloud QX California $XX a upgrade in services for command Cook camera Houston, of notable saw the department, and a City of in XX% Illinois, a software for include million for for Texas as center body-worn video a and order software order a control. access million for security million multiyear the police Safety, million agreement Orange PXX MOI, Department ICI a Systems $XX Some body-worn

video command For versus Operating year, sales, on services, up was or the was and of center $X.X and higher up security million. from improved in acquisitions full $XX XX% by basis growth points sales prior Revenue billion XX.X% were year, the software. LMR leverage. $X.X XXX revenue driven earnings billion,

results. on security LMR and services. products $X.X billion, video revenue growth X% regional up America and in at Looking North QX was

across We $XXX year, growth all both QX LMR, during was video in For technologies. center and in software. XX%, the partially down EMEA and X in declined. quarter, International revenue North a in Pac Latin flat to was command decline growth was and the up X% growth offset million, while segments full security saw Asia due billion, $X.X with with America America

up was up Revenue all technologies. and international by in segments both was America, X full the across with Pac. a in X%, in growth offset billion, For year, slight $X.X decline EMEA Asia revenue and Latin

record a billion extend along compared LMR record U.K. the the by billion, driven was Home Services and backlog LMR Ending XXXX, quarter. to in was in the backlog. Software X in and right through their years $XX.X product up contracts exercise our year, by to Airwave and orders driven during Moving Office's North North America network product to billion, America. extension of last the orders $X.X Airwave $X.X growth Sequentially, up record with backlog fourth contractual

year quarter. Software last up Airwave and to Services up LMR and by record agreements in fourth Software backlog by up Services North in was by extension the million, driven LMR billion driven orders record America. was Sequentially, million driven last North during growth backlog up compared $XXX America in Products $X.X sequentially, and billion SI and compared $XXX year, $X.X the to and was backlog orders.

to XXXX. our outlook for next Turning

an XX% us a count the secondary driven at from effective $XXX limited semiconductor higher we year, growth procuring full XX% rates, million at of with and to This XX%. the also year mid-single-digit by other approximately a assumes supply parts in Software to material average approximately $X.XX XXX diluted products full It up outlook be non-GAAP FX share and market X%, largely assumes available and and approximately current And current earnings we expect in sales and integration per systems between costs, share markets. shares million of For rate weighted of Services. premium of expect and growth tax $X.XX. dynamics

expect Additionally, we to we've backlog. which our progress to fulfilling take effect as pricing recently adjustments portfolio, we made in existing

to share incremental It costs year. of $XX XXX sales with X%, weighted effective expect the between EPS for and million the XXX current shares between of referenced we approximately XX%. $X.XX FX at per and tax million rates, assumes inclusive QX, non-GAAP up an rate diluted $X.XX share, a average material of also million approximately For I and be count

earned $XX cash include OCF full $X.X taxes, incentive cash expect in of of driven in R&D tax we higher We year, higher half U.S. payments operating And federal employee capitalize of our outlook year XXXX and approximately million million billion. continue diligent will the cost beginning requirement flow of This be to full in XXXX. to management. for which is by $XXX the

We of Greg. $XX last to call year, be now approximately to acquisitions. $XXX million inclusive turn investments center to over would expect in driven software, like OpEx recent to security and back I video up million from by the command related

Gregory Brown

Jason. Thanks,

me a additional Let few thoughts. just this end with piece

our an outstanding approximately record orders, was And we and for company. of increased the cash in and $X year XXXX our shareholders repurchases form flow. backlog, We achieved billion billion. sales, We First, to earnings returned share $X.X dividends.

Openpath, command offerings Envysion to video XXX security continue center acquisitions of invest and in our Master. and the we Additionally, Data software with

current and more all was incredibly how our what supply demand color XXXX. strong I'd expectations. you in Demand technologies currently Second, with to like and bit a little impacts seeing on XXXX that across X we're provide with

the suppliers us, it our margins semiconductor referenced, supplier supply companies, required been environment QX. this some and of at demand accelerated higher particular, costs, from and QX. to has the even in delays alternative delays further sources procuring meet fact, and the impact just parts even from challenging, Jason impact and to substitute In many Like In in impacted QX variant. with will increasing was QX for Omicron as semiconductor

XXXX made taken the For be and we revenue our both will that growth PCR. at the anticipate will the by still in full segment, take year lead effect margins half a that slightly the year, expect year-over-year. will products, that operating to of portfolio higher careful security year and solid second and and further driven inclusive full of we look in adjustments We've gross pricing comparable LMR video Products margins be

funding to pleased environment continues I'm remain our our customers growth. with strong. for The Third, really position for exceptionally

customers gaining is with our cycle alone. refresh traction public NEXT orders almost APX million Our QX $XXX safety with in

stronger all more efforts now security. we and organizations, despite our volunteered year, video to command be recognize deployment their capture questions. finally, center Daily. be the in in to the customers continue turn businesses our and ESG around and We is of software joining who, grow. in to proud announcement public And perspective recent in XX Howard ever, allows to XX,XXX wavered were $XX their and which and we will than I'm employees also have that market your And than the in again revenues receive. pleased this I'd Dr. opportunistic to continue our to capital AI our current as Ayanna experience Companies recurring over of environment. one share of more to countries. security I'll Investor's safety us like named welcome really technologies sheet invaluable and enterprise million of back. Admired Tim Her Last incredibly just deliver our record Business our XXX Fortune's our back continue companies pandemic, as Motorola that will in foundation giving advancing Most world recognition Board. the to and continue and of commitment the our be Best these never to I'm a with donated than and employees We robotics and call the hours charitable also in recently by balance our

Tim Yocum

the you Thank a how Operator, Question-and-Answer you, our ask question? callers would Greg. [Operator line please on Instructions]. remind Session to

Operator

Instructions]. [Operator

Our Long first Barclays. come will Tim question with from

Timothy Long

there relevant? of government investigating deal and Could incremental a got other then level a Airwave? the can part networks? about signed of or at how got any that opportunities you those little you about that X-year and for that extension. or a potentially were pricing little to I'll economics that anything after Nice that. the think bit should And -- bit afterwards, kind talk follow-up any position I've in your a on come Greg, a I've high question, we with And a of follow-up. about back impact X talk see

Gregory Brown

in We extend Office Obviously, that's to of to We think by U.K. contractual of the that. Tim. exercised the end December X right we Thanks, it Home Airwave. good were their welcome Sure. pleased XXXX. extension about news. The years

I think actively a the having their And for British said investigation. network We're first continue the does continuing in the to of progress that's we we accordingly. the think, pricing. we're good what mid would the the I existing in think we them. as end this the work obviously the with Authority you summer, to was of It investment or feel their criticality with make that of continue by, about they proud conclude CMA importance reflection We in and contractual also But extended expects also, of engaged own by and resilience Airwave. update or their Markets very that, we responders. continue to parallel, and sometime work to summer time and And at with line, Competition development,

Timothy Long

market. on And video impact year, of into also kind Chinese the if bit good weave you then little kind of players whether business. for the this Could a the with Numbers good from how potential did growth you're -- what were and talk just you And seeing year. it's FCC year. for very Great. a follow-up could these XX%-plus the for involvement that some and NDAA end other of there? growth about outlook that that profile Okay. could the the You for

Gregory Brown

execution by and Access full and Molloy business. Yes, Jack John and Security Kedzierski Tim. Control I'm with our really Video pleased the in Mahesh

for outlook our we year, category category total, XX%. category XX% growing great. that access grow approximately in I control think we grew which is the technology market And the main security and organic, probably is is in is For or When and the XX%, at the XXXX, -- X% video look to the expectation for think X%.

government We're acquisition continue the fixed both take on -- believe we'll nascent We've getting our Indigo pleased Vision. more camera refreshed also is leading really we investment Mahesh camera. software doing refresh refreshing XXXX. the updating share take the the with to news portfolio. Openpath video, and in-car can good and $X billion had Pelco we vertical, around is We're market very last portfolio, again than in share. execution. share. I earlier. billion, larger now, We're good in. I Avigilon believe, taken presence and addressable share a And and did in We The is in So of We're our the XXXX. and very $XX We're traction we growing product XXXX I We've like body-worn year. analytics. in I'm the taking outlook. which in course, we and acquired like

Operator

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

Erik Lapinski

the maybe and what on of refreshes give could on to know lift at technology on cameras. body Maybe couple some on you for of Erik some the like a years the is you of the a deal to follow was Houston specific done. and video you the made the guess, some department side around I color they ago deployment mostly concerns there This their or cited that's reason. police if paused you Meta. just from on had light I'm up and wondering perspective as comments and the if of tech improvements announced in mentioned the I development

John Molloy

Jack. It's Erik. Sure,

Houston. quality originally standpoint. We Houston. a WatchGuard improving they So you're full quality, as back-end put a an was Houston. correct. also device in offer, team's and with years that acquired of both well long-standing of City At issues got We've some City the a few standpoint had focus a think space the the the we've and had pivoting on compelling with body-worn day, for we the broad from the as end from to When we back, our offer relationships as of the service

as I And happy customer have think quality come as throughout real we and history. think we're going fix Motorola a as I the there. they to MSI, have our to trusted issues us appropriate Solutions

forward, full was And growth As in Greg that our a internationally the internationally. believe us. And highlight probably the highlight it orders in an record moving more said, orders for alternative. market relates doubled. both year, domestically well for taking general, important than we're wanted body for really also QX it's quarter I'd 'XX think positioned body-worn as we're and worn the space. has in We share that to general, that, we also to

Erik Lapinski

maybe rates. side. seems be as then you And well, helpful. also board severe? If on chain It you just headwinds of just on could kind But supply mostly seeing Awesome. product-wise just like kind are PCR seeing less the video from anything them in of growth the across would you're color on in give based

Gregory Brown

all There's incremental is we and material is cost video we as Erik, of also additional semiconductor be material taken but of in in million and $XX the million Yes, QX, to as backlog million the QX of some for -- the which primarily incremental we semiconductor expect $XXX $XX well, we have million costs 'XX pricing $XX in PCR. make there increases. LMR, about fulfilling progress in back inclusive half

year our standpoint. and P&L will the earnings improve progresses, from a As operating leverage

Jason Winkler

constraints grew And even XXXX to the with just had, $XXX X% year in it on on over million. that it the PCR, supply

X%. backlog yet So that despite supply grew chain space to deliver, PCR it that and were the in

Operator

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

Adam Tindle

start to wanted the I on Greg, backlog. record

and Or prices remain that to last Because little elevated. locked compression something that costs the a concern that Just clear, that might are can you is in? locked is would be in longer margin be reprice? if bit

you So dynamics there. maybe the touch could on

Gregory Brown

Yes.

I think cannot be largely repriced. pricing and fixed backlog and is

as I've we're it. the LMR out, even take of I you if backlog also PCR giving year of extension really for strong But impact and think the margins guide linearity still of that's ever was well. strong Airwave both you in the and is And QX of seen the informing QX as the and primarily. it as full the

Jason Winkler

of services have price our around contracts, them largest the I'd backlog. a to is our pricing many multiyear point do mechanism services the And escalation. it, also our part of of backlog as within --

business. little bit of Software there of hedge and Services the a parts has on a So

Gregory Brown

point, Good Jason.

Adam Tindle

And Got it. clarification quick just on maybe a that.

some have I'm be of the this sure might that price you those you the price year about that. some and we coming back investors? in What investors maybe would forward of increases. of that backlog as increases Some we're seeing thought ahead concerned to demand record say half of pull those

Jason Winkler

of So things, have among our which customers, the is well, in the they them. do to we backlog, again, demand inventory as prioritizing bulk public low order signal direct their safety They prioritizing channels levels need the be them, and a clean. business believe record we're when nature. We channel. And very we're from

So forward we've strategies, in for terms has largely backlog and quarters, a been number of pricing pull unaffected. and been adjusting price our of

John Molloy

and we Jason, track canceled minimis XXXX. throughout de been orders orders, And obviously the canceled have

Adam Tindle

Got I'm margin so a segment? also for there's and to with unusual QX way If and to us clarification margin for with It's I this the Services any the if a guidance. Jason. Because $XX us could million quick you by down it. hit Software in margin. just in step to trying implied for help Is deal get there understand implied in

Jason Winkler

semiconductor, our The $XX embedded bulk are million the is related to products, lines primarily in of the supply LMR. around which

$XX bulk million $XX or So within million is segment. Products the that of that the

Operator

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

Keith Housum

we're get perhaps Obviously, supply the past seeing of up We're And months? over And as Are going [indiscernible] people months? that it's a materials? it any chain looks few of is a guys questions have few how popping components with issues Just on some it's idea to lot other hearing the you semiconductors on. the just do seeing about any issues other supply chain the from for attention. follow-up frequency next that well you not of here. on that

Jason Winkler

on we is we those cost chain drivers higher We've challenging for obtaining They companies about highlighted chain, The other of that semiconductors. challenge around this the have. as and freight prices. we've There are within which we entirely those. key material talked are having and the elevated, incremental navigated being not are are those. general The front, navigate to Keith, that It's supply mitigating supply it's environment freight but most supply pressures semiconductors. year price are really

I'll higher sheet, We of too, the $XXX point Keith, on nearing position, inventory million to have balance a inventory. you

So available that we're parts for creating categories have the so semiconductors right we a are semiconductors of of delivered, componentry. when the matching other that beyond buffer the

around I'd challenges are our say semis. So key chain of supply and continuing

Keith Housum

the are others? perhaps issue here guys your greater that following suppliers you unable for either demand demand -- you original just the originally fact And just meet are Is that. and than or forecasted up is to on that just your

Jason Winkler

It's both.

Our demand million signal a from semiconductor part year. been has delays had the demand That's incremental what's our increased, delivery has we costs but We've of and suppliers. delivered. original driving to not in $XXX handful what pointed this of

Operator

with question George Notter Jefferies. next Our come will from

George Notter

kind comparable benefit guidance? baked from CARES revenue. you you guidance I that $XXX XXXX. got might you million number ARPA to incremental benefit the your I a what If the look for ask to guess there. at said wanted Obviously, for have do think Act on as into was if of of And stimulus. about I serves, I think benefit in you then wondering And more have go you back stimulus also, be XXXX, XXXX, I if you memory

John Molloy

Sure, George.

about from the a to start, to pivoted really, maybe in we CARES in perspective, So have rescue last $XX XXXX, the American conversations had CARES. plan. million year And

local billion enough, biggest for security interestingly state access control. schools, and billion vertical then highlighted, video is, our of available $XXX solutions and and As to one we available which to $XXX

Jason the sure highlighted actually really perspective, from in from importantly, my of highlighted business. state that not as local portfolio got attractive and environment, budgets but making we've in a it's perspective, seen do more to has history funding it, a the stimulus So my and to the that. probably meet good But been receipts only -- as it, ever Greg we've

demand. new from you're LMR is device security, driving the think which and stimulus well like so APX AI positioned and refresh camera seeing what the future with in have perspective, And and investing and portfolio, backlog things married in analytics and NEXT opportunities, an like things video I think, I

Gregory Brown

Yes.

to The money duration. this other you is note thing multiyear know, ARPA in is, as

regulatory So of other visibility all end billion you $XXX of the about, take you combine being funding, and this receipts that the directed U.S., more, talked them video LMR there's more direct but some in of competing state and in in fixed and companies Equipment XXXX. Secure some robust, When out FCC to of an well. where that the from local goes around the tax state incremental things multiyear billion, Hytera Jack that's then the benefit NDAA, funding way the recently, $XXX Act addition prevent been opportunities as to and Dahua the like Chinese Hikvision the has local in for or certain also and to for

is environment the So strong.

George Notter

Got then what stimulus? any year sense you've for this And your from revenue got in it. for guidance embedded

Jason Winkler

Jack, can talk growth year. terms and about in -- implied both the for maybe SNS development. it's it funnel you But in of the products growth the

John Molloy

pipeline condition I general. stimulus more we of again, ARP -- -- mentalize as state is think important Yes. is well and funding start 'XX I important track our in as I But at look local we up. budgets it's think over the just think the funding to 'XX equally and to And as just it the

Operator

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

Michael DiPalma

Chinese do Is of government vendors you government how demand that mentioned federal elevated, Equipment federal of accounts? big just some as are remarks Secure you such take local by driven for the the that believe to the Act Greg, opportunity been in deployed government and for I solutions. government Hikvision share from video mentioned? particularly the And an scripted Avigilon across has from like primarily your you that have how the

Gregory Brown

Yes, Louie, you. thank

coming reasons. is growth variety for of our think I a

call, above refresh government slightly tailwind. Defense is about Jack the category the doing million the for do to talked on a National the has that control Mahesh video. Yes, targeting the made exceeded $XXX federal last I was we It mobile the in actually investment think access yielded it's be Authorization the fixed we video to go-to-market, customers. of and that. government have, Act, closer overall beneficial I think We were $XXX portfolio NDAA, on Molloy is from million.

vertical. commercial government business think share I take But share and enterprise well. our it I in yes, continue take will to to we So continue as also the grow take think we'll in --

John Molloy

talked in, in feather that portfolio, in acquisition is will and terms contracts, refresh all in what XXXX and I'd government federal business. and about thing Act our critically It that Communications of other bringing we important just which think have with a beyond. I government Secure federal NDAA our actually Pelco be for Greg, things One of we dovetails meant invested

Jason Winkler

And and you fixed Greg, mobile clarify, number both million $XXX video... mentioned just the is to

Gregory Brown

right. That's Total.

John Molloy

market that nascent for It mobile by government. Avigilon and ago. of all video, portfolio. around Mahesh great Into X has a was in-car, serves just complemented fixed years the

and So it's continue a good market us been be. to for

Michael DiPalma

Great. state, And demand during Or and local the could like demand. enforcement the if out is the seeing like Greg, commercial? any you from where you demand most customers? or just parse wondering law federal government you're the there the also I mentioned accelerating it Such was fourth most strongest from customer was you are for which demand Was like pronounced? the particular end as like quarter. -- seeing

Gregory Brown

We've APX that time referenced. demand APX improving, high we It Jack fire refreshing and entered Orders it public safety is QX. has the customers we with was outstanding expectations. I that accelerate in QX And The also strong demand. APX And would introduced -- probably I increased. NEXT got highlight We XN spent NEXT. lot the a for QX. in user end of did radio. had it the then think

highlight referenced, We innings if Louie, have And cycle. the would NEXT North a public APX safety area, NEXT. demand already early in I plans And the highlight, fairly we're America. APX was NEXT to I refresh that introduce I were although in Jack's think of mid-tier X APX to broad, as users

Operator

from with come Paul will question Cowen. Silverstein next Our

Paul Silverstein

you you I you all by I look What 'XX chain? think Jason, Greg, but like say it. heard did, -- supply don't us away if much can apologize growth supply buffer being is chain? growth of would tell growth in I what taken how

Gregory Brown

Well, I would say this.

record incorporates overall Paul, we FX. So be of strong. That constraints context for most you revenue the year demand backlog. think It we year ended that X%. headwind semiconductor in We're of with know is a also providing guidance million that talked It of full $XX throughout about will is the in being XXXX. guidance accelerated we QX.

how think better dissimilar flowing, demand was don't much I a in be year problem from be, look, the certainly that And environment. free supply-constrained It's look, this growth could we wouldn't have much think So when we any about, completed. could I if in more environment. supply think just have too it XXXX I we

demand the is with strong. doing. And I'm is team So we're that navigating and pleased it, the we're execution --

alternatives. at time. broker little look on real-time higher longer, Molloy are redesign product side Scott we looking work. of for Mottonen a design, and carrying buying the doing substitute parts As takes cost. bit higher supply, That We're inventory. yes, engineering We're at we're

where semiconductor entering into supply with are agreements longer-term providers. We can we certain

but So in a I is think parallel, strong. we're lot demand doing

Paul Silverstein

was put be buffer is get I but I you words clear, that I in saying just not just could demand your growth don't you hear that's I'm to supply say. hoping this want I mouth, that XX% what year But like quantification. strong. Greg, questioning constraints. I to you think look heard

Gregory Brown

dissimilar say would year. too I not last from

of take with contours could Paul, think that. the But yes, and it. it's of within that you $XX you're clearly, headwind But on X% stronger million FX. absolutely directionally the So I than

Paul Silverstein

that. appreciate I

now be U.S. I'm follow-up, Just down shut specifically, and that on to overnight. could the the regions a and question the shut civil and Any criminal apologize up effectively I in you that -- other down well. Hytera how as a It's given them arises China to ends the that going throughout could profitability or perhaps it's outside thoughts here, I I recognize in a if But going action I that on if to same to asking criminal of but But revenue action know previously. it impact standpoint? it's proceeds, from business take speculate your them the growth did, good place and not as what thought a happen action and [indiscernible] as suspect time.

Gregory Brown

announced criminal result separate civil was Hytera excess pending I criminal the the down conspiracy. It for the in are $XXX And of actions indictment and in all, of shut Paul. U.S. happy strategy Germany. to litigation, change is that announced. It us and now see doesn't separate million, DOJ effectively the count just this series the XX of as DOJ week first earlier a our judgments, Well, from than our on owe actions. of They they of a Australia civil

this nothing campaign. more will that put I in we a pressure nothing, property the incrementally invest than There's Paul, think important, on intellectual more our them. Look, innovation in. and multiyear we're

to defend We continue it. will

and pursue of I the we're we to that we'll mind what it. around multiyear will for going It don't I but concerted kind like campaign indictment, the stole, to DOJ get collection. do pay Hytera. to do determination to fact get perseverance was their We very to spending announced where continue at back civil need with money doesn't remuneration and different fiercely appropriate from a and interfere I and litigation. streams parallel our that the as criminal and look them our X focus they

Paul Silverstein

million, very damages I litigation, be Greg, royalty were stream clear I recall, saying if action, on to criminal in reduced $XXX hefty the outcome just the you're but the to civil to think of your got based comment, a the perpetuity. of you've independent

yields stream down, whether effectively PCR royalty damages that, will or the us that a Hytera against You're that including verdict investigation shut the and not market, criminal telling Hytera.

Gregory Brown

I you fees that when so prejudgment million over and on. actual trial $XXX in judgments are think attorney's and and add interest our costs

but or property. let intellectual But we're includes the or we'll main, able forward. to secrets is people, just We'll surprised it anybody, not if great. -- seizure, operate continue our going pursue the think steal of In the I'm on And saying see, our Paul, to pressure this I'd so all to going asset they're I company U.S., think in be going do too. we're to that, collections. if trade product I

Paul Silverstein

you. be. for it As should Good

Operator

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

Ahmed Badri

what that there. is referring mainly you, on couple the the So I'm the maybe to on actual start the Thank for your about have earlier. pricing thinking The list were when you elements put questions way, is, to all I asked that price products, questions products? increase and various you into guys color we'll are LMR pricing for about by LMR, the think of off average the of

Jason Winkler

Sure.

and we've and been and offset prices, So a the portfolio in talked about to which the to stack discount up QX. It adjusting help and only It's implementing real management half. to also higher not depends we at tough on the it adjustments really a costs sales number can and yield through We've also on been looking portfolio that surgical competitively. we in lower but put aggregate. programs, and how improvement It's discounts. an list the QX going second be

of the in large mentioned the it of series in will together So increased the pricing we $XX part bulk and place. in of in actions costs the of is because That's put we cost the is of first of a million semiconductor incrementally. we actions the million why half, put that's the million increases offset in aggregate that $XXX of $XXX part half, of it. second that the

Ahmed Badri

much the right, doesn't base then That's minimum -- the costs. into costs, ASP APX account surgical in case, which are that assume portfolio. to increases if customers radio like to safe think just Is compared this the of standard on? the So your price is rest take floor. opting what's the in And the will technically offset into the NEXT, about way to higher increases going right that that's order the a

Jason Winkler

that as The successor, we right? come that's So portfolio, mix increases the premium the mid-tier a that of at with factored for bit. changes are -- contemplated the in price are more across portfolio entire and portfolio to is new the prices at into to been coming around year, referring but products any that the that into base NEXT price APX we're have not elasticity plan perhaps NEXT, that like that enhancements our a products, APX the in that may team its looked of And given market case. portfolio. Jack's products incremental in to the our in Greg make, We've are we rather around mentioned aged

Ahmed Badri

it. Got it. Got

that much being number question. increases? is of So for I how you're think the XXXX, volume that of units is to And price and X shipped? When last how guiding about much X%

Jason Winkler

that, growth is X% majority increases. The of of the volume

Operator

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

Benjamin Bollin

be they've America that a also behavior question think the at funding versus look you budget? your customers about Greg, going this then already helpful. America And I wanted around where a maybe got, relative of you any where projects? I'm would they specifically, figuring steady And how in Plan with Jack, for what to curious Rescue part, Act. spend Plan to maybe color second incrementality start Rescue much strong around was thoughts they're out the size how from that of you're money, Any seeing Act-related, are state

Gregory Brown

before begin earlier, say, think actually referenced Act Jack strong this steady is these I would think a state money. to you around I budgets Ben, with I get there Recovery and Yes, to

I think police. that year on the narrative was the a ago deep

that investment. that seen seeing protect the know a more I but more across these they investment and seeing reversal board. communities. secure think of to and hyperbole also And need we're modern People more we've that infrastructure politically, we're and

stronger. is So think I state steady

sentiment was than is the on investment think several different layer ago, I then around ARPA. it quarters police and you

John Molloy

really able was that technology is infrastructure, towards, the was but PXX devices they funding guidance, to PXX draw be things was obviously, be so, in I guidance, to important how by was issued down actually important, And important. January. that which used, that hundred to products money law a clarification equipment were long. various multiyear of a money. States want to multiyear Department out, different namely there make. a early references -- made ARPA and directed about, this that the very terms was point those pages That it's and Pointed are in talked how we few that that as Treasury final United Ben, like is enforcement pointed we'll They to we several there caveats,

to it's the market we're So we've portfolio taking again, but But across segments, them. and as thing I I I important resonates technology that that think beneficial. I have we we're as funding, very it's leader, said believe one X And the to think more the think to was share. the have said,

Operator

question will Chung JPMorgan. Paul with from next come Our

Paul Chung

from just margin. quick on me So one a gross

year the performance nice here some despite of end to kind So freight costs.

come You 'XX, out then of these price these mentioned of performance as increases some continue margin and of mix we 'XX look flattish to these on freight. kind down, some maybe hopefully, But lingering benefits costs product kind hold.

on step-up those see based can in So gross trends? we a 'XX margin

Jason Winkler

Sure.

pay incremental So there. supply is we've for because necessarily that the isn't We're regarding a a $XXX available to premium supply that talking about semiconductors on million lines the call the is structural. not suppliers having been this temporary. committed from It's

markup, a as part. And the result, same need who paying you premium, manufacturers the if a so for market competing a we're will, open in other

about through to think are to as with, improve, and costs what of as semiconductor get suppliers we're capacity, So we fulfill things those of with this the whom mitigated. relationships those costs we market manufacturers, those all over that needs, working journey whom happens excellent are time, to all hence, working the increase have navigating our and

Operator

Instructions]. [Operator

next from with Our come will Jim question Suva Citi.

James Suva

continual can you wondering, just the and us strong. decisions And of a then wondering, Plan we helpful. like state over actually concern in Rescue that of new they I'm from additional first tools like wondering, over completely demand give American point are those stimulus remains that pretty date I'm new add could informative we make, a now kind this when stuff and antiquated, hump the AARP, put government or I'm or Greg, responders and effective of in like big looking even in and centers? It we to the work mentioned reaching are does to out more pretty now technologically almost be that command kind advanced, lot whiteboard more to systems. implement And that or where are worry steady command centers centers? of seems the a major their like lot some command do, at changes are where that such,

Gregory Brown

that changes. tools on and I can reinvention think, it workflow -- transitions, yes, public existing habits embeds one And and it's fuels that command you is the overall is it's funding Jim, funds inertia more that's and existing those but their the embedded. available those demand it's actually yes also fund workflows. that employee, and know center transformation of software is for because also high-level But answer

recurring will Mahesh strategy of still It a Jack we move are longer. sales think it's which revenue a I No. SaaS less take bit will and be time. want time. a And though. add as more those be where But are be hybrid a over So of do we're last cycles we revenue a a something? more it CapEx little to kind it a Mahesh, that, elongate as and about transitions, you recognition time, customers to as meeting of solution. so did the it clearly, they solution. looking could more annual purchase, positive, to subscription could And sell of Sales along talked expect prem of we

Jack? Okay. No.

Okay.

Operator

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

Gregory Brown

you Again, for afternoon. joining us thank this

to QX For whole you all the not supply additional want just and of but for thank the Motorola Omicron listening, I people year. a for during your constraints, perseverance challenging with

about capability and and unwavering, lot strong. achieve this been we our record that the us to fueled You've of you've talked afternoon. a is Demand allowed results

and we and great semiconductor grow opportunities, X% like inorganic of approximately deploying challenging, sheet, proud significant costs to call. grateful firepower, balance And and while I present drive but $XX million of shareholder environment, very really $XXX as We're on QX, fact it we count to our And margins which Conditions incremental ended we all well. again, share creation. is exceed you I'm backlog. capital continue year the By expect have our still And for we the billion, Software material the FX Motorolans, it I everybody you're X As also record of total even taking operating with The way, headwinds, the expect to with got and business to organic. this, approaching $X and in in funding with the million software. it technologies. our every if $X And stronger XXXX all doing. in of in about, everything growing we and to all billion proud value we're the strategically, intention talked exceptional. surgically, appreciate you that just mentioned, just of remains XXXX. expand

Operator

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

Motorola Solutions (MSI) 10 Feb 222021 Q4 Earnings call transcript