Q4 2023 Motorola Solutions Inc Earnings Call

Greg: Thank you for joining us today. First, Q4 was an exceptional quarter. We achieved record revenue in both segments and all three technologies, including double-digit growth in video security and command center, highlighting the strength and robust demand for our safety and security solutions that help protect people, property, and places. Additionally, we expanded operating margins for the sixth consecutive quarter, generated over $1.2 billion of operating cash, and strengthened our video security portfolio with the recent acquisition of IP Video, creator of the Halo Smart Sensor. Second, our full-year results were outstanding.

Our earnings news release, and the comments made during this conference call in the risk factors section of our 2022 annual report on Form 10-K, or any quarterly report on Form 10-Q, and in our other reports and filings with the SEC, we do not undertake any duty to update any forward looking statements and with that I will turn it over to Greg.

Greg: Tim and good afternoon, and thanks for joining us today.

Greg: First Q4 was an exceptional quarter.

Greg: <unk> record revenue in both segments and all three technologies, including double digit growth in video security and command center, highlighting the strength and robust demand for our safety and security solutions.

Greg: Helped protect people property in places.

Greg: Additionally, we expanded operating margins for the sixth consecutive quarter generated over $1 2 billion of operating cash.

Greg: And strengthened our video security portfolio with the recent acquisition of IP video creator of the Halo Smart sensor.

Greg: Second our full year results were outstanding and our products and Si segment. We grew revenue, 9% driven by strong growth in both LMR and video security and we ended the year with record product backlog. We also expanded operating margins in the segment by 380 basis points driven in part by <unk>.

Greg: In our products and SI segment, we grew revenue 9%, driven by strong growth in both LMR and video security, and we ended the year with a record product backlog. We also expanded operating margins in the segment by 380 basis points, driven in part by higher ASPs and lower product costs. In software and services, revenue was up 10% inclusive of the Airwave revenue reduction, highlighted by strong growth in video security, command center, and our services business outside of the UK. And we also generated record operating cash flow of $2 billion, up 12% versus the prior year. And finally, as we enter 2024, our robust backlog position, coupled with the continued strong demand for our safety and security solutions, positions us well for another year of strong revenue and earnings growth. And with that, I'm going to turn the call over to Jason.

Greg: Higher asps and lower product costs.

Greg: Software and services revenue was up 10% inclusive of the Airwave revenue reduction highlighted by strong growth in video Security Command Center services business outside of the U K and we also generated record operating cash flow of $2 billion up 12.

Greg: Percent versus the prior year.

Greg: And finally, as we enter 2024, our robust backlog position coupled with the continued strong demand for our safety and security solutions positions us well for another year of strong revenue and earnings growth and with that I'm going to turn the call over to Jason.

Jason: Thank you, Greg. Revenue for the quarter grew 5% and was above our guidance with growth in both segments, both regions, and all three technologies. FX tailwinds during the quarter were $16 million, while acquisitions added $17 million. Gap operating earnings were $738 million, or 25.9% of sales, up from 25.6% in the year-ago quarter.

Jason: Thank you Greg revenue for the quarter grew 5% and was above our guidance with growth in both segments, both regions and all three technologies.

Jason: <unk> during the quarter were $16 million, while acquisitions added $17 million.

Jason: <unk> operating earnings were $738 million or 25, 9% of sales up from 25, 6% in the year ago quarter.

Jason: Non-gap operating earnings were $870 million, up 6% from the year-ago quarter, and non-gap operating margin was 30.5%, up 10 basis points. The increase in both GAAP and non-GAAP operating earnings was driven by higher sales and lower direct material costs. GAAP earnings per share was $3.47, up from $3.43 in the year-ago quarter.

Jason: non-GAAP operating earnings were $870 million up 6% from the year ago quarter, and non-GAAP operating margin was 35% up 10 basis points.

Jason: The increase in both GAAP and non-GAAP operating earnings was driven by higher sales and lower direct material costs GAAP earnings per share was $3 47.

Jason: From $3 43 in the year ago quarter.

Jason: Non-GAAP EPS was $3.90, up 8% from $3.60 last year. The growth in EPS was driven by higher sales and higher margins. OPEX in Q4 was $597 million, up $60 million versus last year, primarily due to higher incentives and acquisitions in the current quarter and current year. For the full year 2023, revenue was $10 billion, up 10%, with strong growth in both segments and across all three technologies. Revenue from acquisitions was $98 million, and the impact of unfavorable foreign currency rates was $38 million.

non-GAAP EPS was $3 90 up 8% from $3 60 last year the growth in EPS was driven by higher sales and higher margins.

Jason: Opex in Q4 was $597 million up $60 million versus last year, primarily due to higher incentives and in acquisitions in the current quarter current year.

Jason: For the full year 2023 revenue was $10 billion up 10% with strong growth in both segments and across all three technologies revenue from acquisitions was $98 million and the impact of unfavorable foreign currency rates was $38 million.

Jason: GAAP operating earnings were $2.3 billion, or 23% of sales versus 18.2% in the prior year. The increase was primarily driven by lower direct material costs, higher sales, the $147 million ESN fixed asset impairment charge in the prior year, and lower intangible amortization expense in the current year. Non-GAAP operating earnings were $2.8 billion, up $416 million, and non-GAAP operating margins were 27.9% of sales, up from 26% of sales in the prior year, driven by lower direct material costs, higher sales, inclusive of higher ASPs, and improved operating leverage. Gap earnings per share was $9.93, up 25%, compared to $7.93 in the prior year, primarily driven by higher earnings and the asset impairment charge related to the exit of ESN in the prior year, partially offset by a higher effective tax rate in the current year.

Jason: GAAP operating earnings were $2 3 billion or 23% of sales versus 18, 2% in the prior year. The increase was primarily driven by lower direct material costs higher sales the $147 million ESN fixed asset impairment charge in the prior year and lower intangible amortization expense in the curve.

Jason: Current year.

Jason: non-GAAP operating earnings were $2 8 billion up $416 million and non-GAAP operating margins were 27, 9% of sales up from 26% of sales in the prior year driven by lower direct material costs higher sales inclusive of higher asps.

Jason: And improved operating leverage.

Jason: GAAP earnings per share was $9 93 up 25% compared to $7 93 in the prior year, primarily driven by higher earnings and the asset impairment charge related to the exit of ESN in the prior year.

Jason: Partially offset by a higher effective tax rate in the current year.

Jason: Non-GAAP earnings per share was $11.95, up 15% from $10.36 in 2022 on higher earnings, partially offset by a higher effective tax rate. For the full year, OPEX was $2.2 billion, up $178 million versus 2022, primarily driven by higher employee incentives and higher expenses associated with investments in video and rave. The effective tax rate for 2023 was 21.9% compared to 20.1% in the prior year due to lower benefits from employee stock-based compensation in the current year. Turning to our cash flow, Q4 operating cash flow was $1.2 billion, driven by higher earnings partially offset by higher cash taxes. And for the full year, we generated a record operating cash flow of $2 billion and a record free cash flow of $1.8 billion. The increase was driven by higher earnings, partially offset by higher cash taxes.

non-GAAP earnings per share was $11 95.

Jason: Up 15% from $10 36 in 2022.

Jason: On higher earnings, partially offset by a higher effective tax rate for the full year Opex was $2 2 billion up $178 million versus 2022, primarily driven by higher employee incentives and higher expenses associated with investments in video and rave.

Jason: And the effective tax rate for 2023 was 21, 9% compared to 21% in the prior year due to lower benefits from employee stock based compensation in the current year.

Jason: Turning to our cash flow Q4, operating cash flow was $1 2 billion driven by higher earnings partially offset by higher cash taxes and for the full year, we generated record operating cash flow of 2 billion and record free cash flow of $1 8 billion. The increase was driven by higher earnings partially offset by higher cash tax.

Jason: Capital allocation for 2023 included $804 million in share repurchases, $589 million in cash dividends, and $253 million of cap facts. Additionally, during the quarter, our board of directors approved a $2 billion increase to the Share Repurchase Program and an 11% increase in our dividend, which is the 13th consecutive year of double-digit increases. Moving next to segment results, and the products in the SI segment, Q4 sales were up 4% versus last year, driven by growth in LMR and video. Operating earnings were $567 million, or 30.0% of sales, up from 28.4% in the prior year, driven by higher sales and lower direct material costs.

Jason: <unk>.

Jason: Capital allocation for 2023 included $804 million in share repurchases $589 million in cash dividends and $253 million of Capex.

Jason: Additionally, during the quarter, our board of directors approved a $2 billion increase to the share repurchase program.

And an 11% increase in our dividend, which is the 13th consecutive year of double digit increases.

Jason: Moving next to segment results in the products and Si segment Q4 sales were up 4% versus last year driven by growth in LMR and video operating earnings were $567 million or 30.0% of sales up from 28, 4% in the prior year, driven by higher sales and lower direct material costs.

Jason: Some notable Q4 wins and achievements in this segment include a $90 million P25 system and devices order from a U.S. customer, a $67 million P25 device order for Emergency Services Telecommunications Authority in Australia, a $57 million P25 APEX NEXT devices order for a U.S. customer, a $38 million P25 system order for the State of Arizona Department of Public Safety, a $31 million Te And for the full year, products and S.I. Revenue was $6.2 billion, up 9% from the prior year, driven by higher sales of LMR and video. Revenue from acquisitions was $15 million, and currency headwinds were $19 million.

Jason: Some notable Q4 wins and achievements in this segment include a $90 million P 25 system and devices order from a U S customer of $67 million P 25 device order.

Jason: For emergency services Telecommunications authority in Australia.

Jason: $7 million 25 apex next devices order for a U S customer of $38 million P. 25 system order for the state of Arizona Department of public safety, a $31 million Tetra system order for a European customer.

Jason: And a $13 million fixed video order for an international customer.

Jason: And for the full year products and Si revenue was $6 2 billion up 9% from the prior year driven by higher sales of LMR and video revenue from acquisitions was $15 million and currency headwinds were $19 million.

Jason: Full-year operating earnings were $1.5 billion, or 24.3% of sales, up from 20.5% in the prior year on higher sales, inclusive of higher ASPs and lower direct material costs. In software and services, Q4 revenue was up 7%, driven by growth in video, command center, and LMR. Revenue from acquisitions was $15 million in the quarter, and FX tailwinds were $11 million.

Jason: Full year operating earnings were $1 5 billion or 24, 3% of sales up from 25% in the prior year on higher sales inclusive of higher Asps.

Jason: And lower direct material costs and software and services Q4 revenue was up 7% driven by growth in video Command Center and LMR revenue from acquisitions was $15 million in the quarter and FX tailwind were $11 million Q4 operating earnings in the segment were $303 million and operating margins were 31, 6%.

Jason: Q4 operating earnings in the segment were $303 million, and operating margins were 31.6%, down from 34.4% last year, primarily driven by the airwave revenue reduction related to the price control. Some notable Q4 highlights in the segment include a $330 million LMR managed services renewal through 2034 for Denmark's nationwide public safety communications network, a $48 million command center order for the city of Chicago's Office of Public Safety Administration, a $20 million LMR service agreement for Spokane, Washington, for regional emergency communications, and a $19 million mobile video order from a U.S. customer, and finally, a $10 million command center For the full year, revenue was $3.7 billion, up 10% on growth in LMR services, command center, and video. Revenue from acquisitions was $83 million, and currency headwinds were $19 million. For the full year, operating earnings were $1.3 billion, or 33.9% of sales, down 140 basis points versus the prior year, driven by the airway revenue reduction and higher acquisition-related expenses.

Jason: Down from 34, 4% last year, primarily driven by the Airwave revenue reduction related to the price control.

Jason: Some notable Q4 highlights in the segment include a $330 million LMR managed services renewal through 2034 for Denmark's nationwide public safety Communications network of $48 million Command Center order for the city of Chicago's office of public safety administration by $20 million LMR service.

Jason: For Spokane, Washington Regional Emergency Communications.

And a $19 million mobile video order from a U S customer and finally, a $10 million Command Center order for the city and county of San Francisco.

Jason: For the full year revenue was $3 7 billion up 10% on growth in LMR Services Command Center and video.

Jason: Revenue from acquisitions was $83 million and currency headwinds were $19 million for the full year operating earnings were $1 3 billion or 33, 9% of sales down 140 basis points versus the prior year driven by the Airwave revenue reduction and higher acquisition related expenses.

Jason: Looking next at our regional results, North America revenue was $2 billion in Q4, up 6%, and $6.9 billion for the full year, up 9%, driven by growth in both segments and across all three technologies. And in international, Q4 revenue was $832 million, up 3% versus last year, driven by growth in video and LMR. And for the full year, international revenue was $3 billion, up 11% versus last year, driven by growth in LMR and video.

Jason: Looking next at our regional results North America revenue was $2 billion in Q4 up 6% and $6 9 billion for the full year up 9% driven by growth in both segments and across all three technologies and an international Q4 revenue was three $832 million up 3% versus last year driven by growth in <unk>.

Jason: <unk>, an LMR and.

Jason: And for the full year International revenue was 3 billion up 11% versus last year driven by growth in LMR and video.

Jason: Moving to backlog. Ending backlog for Q4 was $14.3 billion, down $88 million versus last year, inclusive of approximately $1 billion of backlog reduction related to the airwave price control and revenue recognition for airwave and ESN. Sequentially, backlog was down $15 million, inclusive of the Airwave and ESN reduction and $160 million of favorable effects.

Jason: Moving to backlog ending backlog for Q4 was $14 3 billion down $88 million versus last year inclusive of approximately $1 billion of backlog reduction related to the airwave price control and revenue recognition for Airwave and ESN.

Jason: Sequentially backlog was down $15 million inclusive of the airwave, and ESN reduction and $160 million of favorable FX.

Jason: In the products and SI segment, ending backlog was up $93 million, or 2%, driven primarily by strong demand in North America. Sequentially, backlog was up $99 million, also driven by demand in North America. In software and services, backlog decreased $181 million from last year and $114 million sequentially.

Jason: And the products and Si segment, ending backlog was up $93 million or 2% driven primarily by strong demand in North America sequentially backlog was up $99 million also driven by demand in North America.

Jason: In software and services backlog decreased to $181 million from last year and $114 million sequentially.

Jason: Excluding Airwave and ESN, software and services backlog was up almost $800 million versus last year, driven by strong multi-year agreements in both regions. Turning now to our outlook, we expect Q1 sales to be up approximately 8%, with non-GAAP earnings per share between $2.50 and $2.55 per share. This assumes a weighted average diluted share count of approximately 172 million shares and an effective tax rate of approximately 23%.

Jason: Excluding airwave and ESN software and services backlog was up almost $800 million versus last year, driven by strong multiyear agreements in both regions.

Jason: Turning now to our outlook, we expect Q1 sales to be up approximately 8% with non-GAAP earnings per share between $2 50, and $2 55 per share. This assumes a weighted average diluted share count of approximately 172 million shares and an effective tax rate of approximately 23% and <unk>.

Jason: And for the full year, we expect revenue growth of approximately 6% and non-GAAP earnings per share between $12.62 and $12.72 per share. This full year outlook assumes a weighted average diluted share count of approximately 171 million shares and an effective tax rate between 23% and 24%. Additionally, we expect another strong year of operating cash flow with 2024 expectations of $2.2 billion in operating cash flow. And before I turn it back to Greg, I wanted to share some additional highlights.

Jason: For the full year, we expect revenue growth of approximately 6%.

Jason: And non-GAAP earnings per share between $12 62, and $12 72 per share. This full year outlook assumes a weighted average diluted share count of approximately 171 million shares and an effective tax rate between 23 and 24%.

Jason: Additionally, we expect another strong year of operating cash flow with 2020 for expectations of $2 2 billion in operating cash flow.

Speaker Change: And before I turn it back to Greg I wanted to share. Some additional highlights first I wanted to give you some color on the technology growth expect expectations that are included in the sales guidance for the year and video security and access control, we're planning for 10% growth, which is informed by the acceleration and strong adoption of our cloud offerings for.

Jason: First, I want to give you some color on the technology growth expectations that are included in the sales guidance for the year. For video security and access control, we're planning for 10% growth, which is informed by the acceleration and strong adoption of our cloud offerings. For Command Center, we also expect 10% growth, consistent with last year's organic growth rate. And for LMR, we expect to grow mid-single digits or high single digits when normalized for the impact of the UK Home Office.

Speaker Change: Command Center, we also expect 10% growth consistent with last year's organic growth rate.

Greg: And in LMR, we expect to grow mid single digits or high single digits when normalized for the impact of the UK home office.

Jason: Second, I would like to share with you some exciting updates about our video business. In light of two recent partnerships that support our growth expectations, one with Jabil and another with Google. With Jabil, we entered into a strategic manufacturing agreement where Jabil will assume responsibility for our manufacturing operations at our sites in Canada and Texas.

Greg: Second I would like to share with you some exciting updates about our video business in light of two recent partnerships that support our growth expectations, one with Jabil and another with Google.

Greg: With Jabil, we've entered into a strategic manufacturing agreement, where jabil will assume responsibility.

Greg: For our manufacturing operations at our sites in Canada, and Texas. This agreement further Optimizes our video supply chain provides redundancy future cost savings and scalability. Additionally allows us to focus on engineering, designing and bringing to market video solutions that serve our customer security needs, while continuing to enable.

Jason: This agreement further optimizes our video supply chain, provides redundancy, future cost savings, and scalability. Additionally, it allows us to focus on engineering, designing, and bringing to market video solutions that serve our customer security needs while continuing to enable regulatory compliance with NDAA rules for the procurement of secure equipment and with Google. Yesterday, we announced a new strategic agreement with Google Cloud that harnesses the power of their latest cloud advancements to enable assistive intelligence such as accurate and reliable video content, mapping, and other AI capabilities. Google Cloud also enables Vigilant Alta, our fast-growing cloud-native fixed video and access control platform, which we introduced a little more than a year ago. Alta combines the power of our AI analytics with the ease and simplicity of a cloud-delivered VMS that is increasingly preferred by some verticals like education.

Greg: Regulatory compliance with NDAA rules for the procurement of secure equipment.

Greg: With Google Yesterday, we announced a new strategic agreement with Google Cloud that harnesses the power of their latest cloud advancements to enable a system of intelligence such as accurate and reliable video content.

Greg: Mapping and other AI capabilities, Google Cloud also enables a vigilant alter our fast growing cloud native fixed video and access control platform, which we introduced a little more than a year ago also combines the power of our AI analytics with the ease and simplicity of our cloud delivered Vms that is increasingly preferred by <unk>.

Greg: Some verticals like education.

Jason: The rapid adoption of Alta contributed almost a quarter of our growth last year in total video and included a higher subscription attachment compared to a traditional Avigilon Unity sale. And finally, we ended the year with a very strong balance sheet, including $1.7 billion in cash, a fixed rate balance debt maturity profile, and our net debt to EBITDA ratio of 1.4 is our lowest since 2015, providing us with ample flexibility to continue to deploy capital and drive shareholder value. I'll now turn the call back to Greg.

Greg: The rapid adoption in Alta contributed almost a quarter of our growth.

Greg: Last year to total video and includes a higher subscription attachment compared to a traditional a vigilant unity sale.

Greg: And finally, we ended the year with a very strong balance sheet, including $1 7 billion in cash a fixed rate balanced debt maturity profile and our net debt to EBITDA ratio of one four is our lowest since 2015, providing us with ample flexibility to continue to deploy capital and drive shareholder value.

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

Greg: Thanks, Jason. First, 2023 was a phenomenal year for the company. We achieved record, and all three technologies significantly expanded operating margins, grew earnings per share by 15%, and generated record operating cash flow of $2 billion. We also returned $1.4 billion to our shareholders through dividends and share repurchases, and we strengthened our video security portfolio with the recent acquisition of IP Video. Second, this past November, we announced our new brand narrative, Solving for Safer. This reflects our purposeful transformation centered on public safety and enterprise security and our sharpened focus on solving for safer communities, safer schools, and safer businesses. Our solutions across LMR, Video Security, and Command Center, which are powered by artificial intelligence, enable collaboration between public safety agencies and enterprises, connecting those in need with those who can help.

Greg: Thanks, Jason.

Greg: First 2023 was a phenomenal year for the company we achieved record.

Greg: And all three technologies significantly expanded operating margins grew earnings per share by 15% and generated record operating cash flow of $2 billion. We also returned $1 4 billion to our shareholders through dividends and share repurchases and we strengthened our video security portfolio with the recent.

Greg: <unk> of IP video.

Greg: Second this past November we announced our new brand narrative solving for safer.

Greg: This reflects our purposeful transformation centered on public safety and enterprise security and our sharpened focus on solving for safer communities safer schools and safer businesses, our solutions across LMR video security and command center that are powered by artificial intelligence enabled <unk>.

Greg: <unk> between public safety agencies and enterprises connecting those in need with those who can help.

Greg: And while we recognize technology is not the only way to a safer future, it does play a vital role. And finally, as we enter 2024, the momentum of our business remains strong, and funding for public safety continues to be a priority.

Greg: And while we recognized technology is not the only way to a safer future. It does play a vital role.

Greg: And finally as we enter 2024 the momentum of our business remains strong funding for public safety continues to be a priority investments we've made in the portfolio, including our apex next device and by the way the software applications that run on this device are driving higher asp's for our products and strong growth.

Greg: Investments we've made in the portfolio, including our ApexNext device and, by the way, the software applications that run on this device, are driving higher ASPs for our products and strong growth in software and services. We're also seeing a noticeable acceleration of cloud adoption and video security that is driving margin-accretive revenues in software and services. And with our exceptionally strong balance sheet, we have the opportunity to continue to deploy capital to drive long-term shareholder value. I'm extremely pleased with how we're positioned, and I expect 2024 to be another year of strong revenue and earnings growth for our company. I'll now turn the call back over to Tim.

Greg: In software and services. We're also seeing a noticeable acceleration of cloud adoption and video security that is driving margin accretive revenues in software and services and with our exceptionally strong balance sheet. We have the opportunity to continue to deploy capital to drive long term shareholder value on the extremes.

We are pleased how we're positioned and I expect 2024 to be another year of strong revenue and earnings growth for our company I'll now turn the call back over to Tim.

Tim: Thanks, Greg. Before we begin taking questions, I'd like to remind callers to limit themselves to one question and one follow-up to accommodate as many participants as possible. Operators, please remind our callers on the line how to ask a question. The floor is now open to questions. If you have a question or comment, please press star 5 on your telephone keypad. If, for any reason, you would like to remove yourself from the queue, please press star 5 once again.

Tim: Thanks, Greg before we begin taking questions I'd like to remind callers to limit themselves to one question and one follow up to accommodate as many participants as possible.

Greg: Alright.

On the line how to ask a question.

Greg: Yes.

Tim: The floor is now opened for questions. If you have a question or comment. Please press star five on your telephone keypad. If for any reason you would like to remove yourself from the queue. Please press star five once again we.

George Notter: We do ask that while you pose your question, please pick up your handset to provide optimal sound quality. The first question is from George Notter with Jeffreys. Your line is now open. Hi guys, thanks a lot. Hey, I have a question on margin expansion in the business. I guess I wanted to ask about, you know, what kind of headwind you guys still have running through the business in 2023. I'm thinking about things like expedite fees and, and, and even freight costs.

Tim: We do ask that while you pose your question. Please pickup your handset to provide optimal sound quality.

Tim: The first question is from George Notter with Jefferies. Your line is now open.

George Notter: Hi, guys. Thanks, a lot.

George Notter: A question on the margin expansion in the business I guess I wanted to ask about what kind of headwind you guys still had running through the business in 2023, I'm thinking about things like expedited fees and.

George Notter: And even freight costs I know that.

Greg: I know that a lot of those fees didn't come out of the model until you guys had burned down some backlog, so I guess I'm wondering how much of the headwind was in the 2023 numbers. And then, I assume that'll be all out fully for the 2024 year. I'm just kind of wondering what kind of benefit you might get on margins there. And then just as a follow-up, second question, but on Silver Lake, I'm just curious about, is there any update on what those guys might do? And how much you kind of funded the, you know, the unwind of that position? Thanks a lot.

George Notter: So a lot of those fees didn't come out of the model until you guys had burned down some backlog. So I guess I'm wondering how much of a headwind was the was in the 2023 numbers and then I assume that'll be all out fully from the 2024 year.

George Notter: I'm just kind of wondering what kind of benefit you might get on margins. There and then just as a follow up.

George Notter: Second question was just on Silverlake I'm just curious about.

George Notter: Is there any update there on what those guys might do.

George Notter: And how much you kind of fund.

George Notter: The unwind of that position thanks, a lot.

Speaker Change: Yes, George So just to reconfirm, we do expect operating margin expansion for.

Greg: George, so just to reconfirm, we do expect operating margin expansion for 2024. That's in part due to continued improvement in PPV. I have to compliment Jason and the supply team and Jack's operations team. They did a great job exceeding what we set out as targets last year. And to remind you, we are expecting another $60 million of PPV improvement this year and in 2024. From a gross margin standpoint for the firm, we expect them to be comparable or slightly higher.

George Notter: For 2024 Thats in part by informed the continued improvement in PPV di Asti complement Jason in the supply chain and Jack's ops team did a great job.

George Notter: Exceeding what we set out as targets last year and to remind you we are expecting another $60 million of pp the improvement.

George Notter: In this year and <unk> 24 from a gross margin standpoint for the firm, we expect them to be comparable to slightly up. So I think we do a pretty good job on the operating leverage side of this business both on gross margin and operating margin.

Greg: So I think we do a pretty good job on the operating leverage side of this business, both on gross margin and operating margin. By the way, the OPEX envelope year over year is probably going to be up about $80 million, 24 over 23, of which half is organic, $40 million, and $40 million is inorganic. As it relates to Silver Lake, really no update other than that they are in the final year of their second five-year pipeline. It expires in September.

George Notter: By the way the Opex envelope year over year is probably going to be up about $80 million.

George Notter: For over 23 of which half is organic $40 million $40 million is inorganic.

George Notter: As it relates to silverlake.

George Notter: Really no update that they are in the final year of their second five year pipe it expires in September.

Greg: The diluted share count is already calculated into our EPS expectations, so really, there is really nothing to report at this point. The partnership remains good, and we'll see how that plays forward for the balance of the year. By the way, as we think about Silver Lake and the expiration of the pipe, we do expect. Higher interest expense this year is expected to be about $40 million, which includes the assumption of $1.3 billion of refinancing, of which $1 billion is the Silver Lake note and $300 million is debt that expires in September this year.

George Notter: Diluted share count is already calculated into our EPS expectations.

George Notter: So really nothing to report at this point the partnership remains good and we'll see how that plays forward for the balance of the year.

George Notter: By the way we do expect.

George Notter: As we think about silver lake on the exploration of the pipe we do expect.

George Notter: Higher interest expense this year to be about $40 million, which includes the assumption of $1 3 billion of refinancing of which $1 billion is the silverlake notes and $300 million is that expires in September of this year.

George Notter: Great. That's helpful. Thanks very much. George.

Speaker Change: Great. That's helpful. Thanks very much.

George.

Speaker Change: The next question comes from the line of came along with Barclays. Your line is now open.

Tim Long: The next question comes from the line of Tim Long with Barclays. Your line is now open. Thank you. I just wanted to ask a little bit about the top line. Maybe, Greg, for you, the Q1 guide looks pretty strong, but the full year is a little bit low in growth, so maybe can you talk about, you know, visibility or what you're kind of expecting in the back half of the year? Is it just comparisons or conservatism or anything else we need to be aware of for that little discrepancy in growth rates? And then I did want to secondly follow up on the video about 10% growth I mean, obviously, the numbers are getting bigger here, but can you kind of put that in context of, you know, where you are with share gains and getting into, you know, deeper into the government verticals and getting some benefits this year from ARPA funding for safe schools and other areas? If you could just put that into context with some of those drivers, that would be great.

Speaker Change: Okay.

Came: Thank you.

Barclays: Just wanted to ask a little bit on the top line.

Barclays: Maybe Greg for you.

Barclays: Q1 guide books, it looks pretty strong.

Barclays: The full year is a little bit lower on growth. So maybe can you talk about visibility or or what youre kind of expecting.

Barclays: In the back half of the year.

Barclays: This compares of conservatism or anything else.

Barclays: We need to be aware of for that.

Barclays: Little discrepancy in growth rate and then I did one secondly follow up on the video 10% growth.

Barclays: Obviously, the numbers are getting bigger here, but can you kind of put that in context of where you are with share gains in getting into.

Barclays: Deeper into the government verticals and getting some benefits next year from ARPA funding say unsafe schools and other areas. If you can.

Barclays: Just put that into context with some of those drivers that would be great. Thank you.

Greg: So let's take the full year first. I think it's important to say that I'm super proud of last year.

Speaker Change: So let's take the full year first.

Speaker Change: I think it's important to say that.

Speaker Change: Super proud of last year, but to your point as we're sitting here in February backlog is strong, but Tim so as the pipeline.

Greg: But to your point, as we're sitting here in February, the backlog is strong, but Tim, so is the pipeline. So we're in a good-aged backlog position, but the pipeline remains strong as well, which makes me feel good about where we sit here for the balance of the year. I'd also tell you that when we think about the full year, it comes off of a Q4 that exceeded our guidance. It comes off of a full year that exceeded our guidance. And if you anchor it to the color I gave last time at about 10 and a half billion, it's about 75 million higher than the reference a quarter ago.

Speaker Change: So we're in a good aged backlog position, but the pipeline remains strong as well, which makes me feel good.

Speaker Change: About where we sit here for the balance of the year.

Speaker Change: I'd also tell you that when we think about the full year guide, it's coming off of.

Speaker Change: Q4 that exceeded our guidance coming off of a full year that exceeded our guidance and if you anchor it to the color I gave last time at about $10 5 billion.

Speaker Change: It's about $75 million higher than that referenced a quarter ago now having said all of that so.

Greg: Now, having said all that, we guide for full year 6%. I remind you that 200 million is a headwind related to the UK Home Office. So, year over year, we expect Airwave revenue to be about 375 million. But if you take year over year, you add in the 200 million full year UK Home Office headwind that can normalize the year over year comparison.

Speaker Change: So we guide for full year, 6% I remind you that $200 million is a headwind related to the UK home office. So year over year, we expect airwave revenue to be about $375 million, but if you take year over year, you add in the 200 million full year U K home office.

Speaker Change: Headwind.

Speaker Change: That can normalize the year over year comparison. Additionally, one other thing worth mentioning is Jack talked about this a quarter ago, we had exceptionally strong revenue contribution from Ukraine.

Greg: Additionally, one other thing worth mentioning is, and Jack talked about this a quarter ago, we had an exceptionally strong revenue contribution from Ukraine of $150 million last year. And based on what's expected to be shipped in backlog, we expect that to be 50 million. So you take the year over year 6%.

Speaker Change: $150 million last year and based on what's expected to be shipped and backlog, we expect that to be $50 million. So you take the year over year, 6% you.

Greg: You take 200 million decrement for the UK home office headwind, you normalize for Ukraine, and I think our growth is quite solid and a prudent guide at this point in time. One other insight into video growth of approximately 10% this year. Within that, we're really pleased with the cloud growth that we're seeing. Alta, which we talked about on the call, as a platform that is cloud native, is growing exceptionally well. We've also made a decision to rationalize some of our on-premises DMS.

Speaker Change: You take $200 million decrement for U K home office headwind, you would normalize for Ukraine, and I think our growth is.

Speaker Change: Quite solid and a prudent guide at this point in time.

Speaker Change: One other insight into the video growth of approximately 10% this year within that.

Speaker Change: Pleased with the cloud growth that we're seeing through Ulta, which we talked about on the call is a platform which is cloud.

Speaker Change: Cloud native is growing exceptionally well. We've also made a decision to rationalize some of our on Prem Vms and the combination of that growth rate in 'twenty, four and rationalizing the Vms is about $40 million of impact in 2024. So we're.

Greg: The combination of that growth rate in 24 and rationalizing the VMS is about $40 million of impact in 2024. We're continuing to grow. Jack, do you want to talk about the market and how we're doing in video? Yes, Tim.

Speaker Change: Continuing to grow and Jack do you want to talk about the market and how we're doing in video yes, Tim I'd also dimensionalize, both that Jason alluded to it both in script in his comments clouds growing but we also are expectations are also that are on Prem business is very healthy continues to grow.

Jack: I'd also dimensionalize both. Jason alluded to it both in the script and his comments. Cloud's growing, but our expectations that our on-prem business is very healthy continue to grow. As it relates to share, we believe we're continuing to take market share. You also asked a question, Tim, about government.

Jack: As it relates to share. We believe we are continue to take market share. You also asking a question Tim and government total government video sales that encompasses both mobile and fixed video are now at $500 million in 2023, and I would highlight our government video growth.

Jack: Total government video sales, that encompasses both mobile and fixed video, are now at $500 million in 2023. I would highlight that our government video growth is growing faster than our overall total business. I don't think it's being driven at all by ARPA; I think it's being driven by prioritization and really, you know, building more and more efficiency and mobility within police forces as they have to contend with more and more crime.

Jack: It's growing faster than our overall total business so I think.

Jack: I don't think its being driven at all by ARPA I think it's being driven by prioritization and really building more and more efficiency in mobility within police forces as they have to contend with more and more crime and one other thing just because we're still to George's question weaning off PPV and we'll have some commensurate benefits this year.

Greg: And one other thing, just because we're still, to George's question, weaning off PPV, and we'll have some commensurate benefits this year. If you take last year and this year, as we're working through this supply chain and elevated inventory and improved freight and PPV, if you look at first half and second half, Tim, to your point about guidance and linearity, it's very similar to last year. So I'm not concerned about anything as we sit here with our expectations for the full year performance. Okay, thank you very much.

Jack: You take last year and this year as we're working through the supply chain and elevated inventory and improved freight and PPV. If you look at first half and second half Tim to your point about guide and linearity, it's very similar to last year. So I'm not concerned about anything as we sit here with our expectation for the <unk>.

Jack: Full year performance.

Speaker Change: Okay. Thank you very much.

Jason: Thanks, Tim. The next question comes from the line of Matthew Nicknam with Dutchess Bank. Your line is now open. Hey guys, thank you for taking the questions. One question, one follow-up. So just on the supply chain, I think this was alluded to a little bit, but just if you can give any more color on the latest you're seeing there and any noticeable impacts from some of the disruption we've seen on the Red Sea front, if that's impacted you guys at all in terms of costs. And then, secondarily, can you just talk a little bit more about the Jabil Agreement's strategic rationale there Thank you. Sir, I'll answer the second one first.

Speaker Change: Thanks, Tim.

Speaker Change: The next question comes from the line of Matthew.

Matthew: <unk> Bank. Your line is now open.

Matthew: Hey, guys. Thank you for taking the questions.

Matthew: One question one follow up so just on the supply chain I think this was alluded to a little bit but just if you can give any more color on the latest you're seeing there and any noticeable impact from some of the <unk>.

Matthew: Disruption, we've seen on the Red Sea frankly, if that's impacted you guys at all in terms of cost.

Matthew: And then secondarily can you just talk a little bit more about the jabil agreements strategic rationale there and any cost implications, we should keep in mind. Thank you.

Speaker Change: Sure I'll answer the second one first the Jabil agreement.

Jason: The Jabil agreement is for them in 2024 to operate the two factories that will be transitioning to them, so not a significant change in cost profile in 24, but as we look to 25 and with our growth expectations, there'll be opportunities for cost savings as well as an efficient way to scale the growth that we're expecting. So it was an agreement between us looking into the future, and we're very pleased with it, and it provides us with additional redundancy as well. It'll help us scale, grow, and also manage our cost envelope as we grow. And the Red Sea? In the Red Sea, we remain primarily on air as our mode of transportation.

Speaker Change: Is for them in 2024 to operate the two factories that will be transitioning to them. So not a significant change in cost profile in 'twenty four but as we look to 'twenty five and with our growth expectations there'll be opportunities for cost as well as an efficient way to scale the growth that we're expecting so it was an agreement and us looking.

Speaker Change: Into the future and we're very pleased with it.

Speaker Change: Providing us additional redundancy as well it will help us scale grow and also manage our cost envelope as we as we grow.

Speaker Change: And the Red sea or the Red Sea.

Speaker Change: We remain primarily an error as ours our mode of transportation.

Jason: And so, as a result, not a lot goes on the ocean. And the impact of higher container rates is negligible for us. So given the state of the supply chain, while it's improving, we found that air and air rates are a good investment to make, and make sure that we're getting everything we need when we need it. We've seen continued improvement from the supply chain and our vendors, particularly in semiconductors, and they have some improvements to make, and we expect them to continue to improve on the deliveries of, in particular, nanometer chips of 40 nanometers and above in So, improving and working through it. And as we work through the year, it would be our expectation at the end of the year to have overall inventory reduced again this year as things normalize and improve. That's relative to the 827 you ended last year at.

Speaker Change: And so as a result.

Speaker Change: Not a lot on the ocean and the impact of higher container rates is negligible for us so.

Speaker Change: Given the state of the supply chain, while it's improving.

Speaker Change: We found that air and air rates are a good investment to make and make sure that we're getting everything we need when we need it we've seen continued improvement.

From supply chain, and our vendors, particularly in semiconductors.

Speaker Change: And they have some improvements to make and we expect them to continue.

Speaker Change: To improve on the deliveries of in particular nanometer chips are 40 nanometers and above in some cases, so improving and working through it and as we work through the year it would be our expectation at the end of the year.

Speaker Change: To have overall inventory.

Speaker Change: <unk> reduced again.

Speaker Change: This year as things normalize and improve.

Speaker Change: That's relative to the 827 you ended last year at.

Jason: That's right. The 827 was down 200 from its 12-month predecessor, and we expect to drive the 827 down even further by year's end as we navigate an improving environment. I appreciate it. Thank you. Thank you. The next question comes from the line of Adam Tindle with Raymond James. Your line is now open. Okay, thanks. Good afternoon,

Speaker Change: That's right. The <unk> 27 was down 212 months predecessor, and we expect to drive to a 27 down even even further by year's end as we navigated an improving environment.

Speaker Change: I appreciate it thank you.

Speaker Change: Thank you.

Speaker Change: The next question comes from the line of Adam Tindle with Raymond James Your line is now open.

Adam Tindle: Okay. Thanks, Good afternoon, Jason and I, just wanted to start on backlog trends for a clarification I know reported backlog in total appears to headline appears to be down, but I think theres a lot of impact from airwave than that could you just give us a sense of what backlog looks like ex Airwave and then just as a follow up on that topic.

Adam Tindle: Jason, I just wanted to start on backlog trends for clarification. I know reported backlog in total appears to be down, but I think there's a lot of impact from Airwave in that. Could you just give us a sense of what backlog looks like ex-Airwave? And then, just as a follow-up on that topic, either Jack or Greg, or if you want to both weigh in, this is just a metric that I think investors are watching very closely because backlog builds and records have happened across tech hardware, whether it's Cisco and networking or PCs before that, and led to a sharper digestion period than initially anticipated So, I wonder if you could maybe just double-click on the current state of supply and demand and address how you think about the similarities or differences in what you're seeing in your business and the time and shape of normalization if and when that does happen. Thank you.

Speaker Change: Either Jack or Greg or if you want both weigh in there.

Speaker Change: This is just a metric that I think investors are watching very closely because backlog builds and records have happened across tech hardware, whether it's cisco in networking or Pcs before that and lead to a sharper digestion period than initially anticipated once that backlog started softening. So wondering if you could maybe just double click on the current.

Speaker Change: State of supply and demand and address how you think about the similarities or differences in what youre seeing in your business and the time and shape of normalization, if and when that does happen. Thank you.

Greg: Yeah, I would start out and tell you that this is one of the things I'm most proud of when I look at the print for the full year, the overall backlog of $14.3 billion ending year from a year ago, with an absorbent, just under $800 million decrement for the calculation of Airwave and the three-year-plus or three-year backlog that that sits. So to be able to keep that at the same level or comparable levels with that reduction is pretty significant. The other thing that gives me optimism is the exceptionally strong product backlog that we exited in Q4 and the aged backlog that we sit in the position of as we enter. But I also want to remind you, so I love the backlog position, but I also love the pipeline and the ongoing demand and what I see in the funnel.

Speaker Change: Yes, I would start out a until you that this is one of the things I'm. Most proud of when I look at the trends for the full year overall backlog of $14 3 billion.

Speaker Change: Ending year.

Speaker Change: From a year ago with absorbing.

Just under 800 million dollar decrement.

Speaker Change: For the calculation of Airwave.

The three year, plus or three year backlog that that sits so be able to keep that at the same level or comparable levels with that reduction is pretty significant. The other thing that gives me optimism is the exceptionally strong product backlog that we exited Q4 and the aged backlog that we sit in the position of <unk>.

Speaker Change: As we enter but I also remind you that so I love the backlog position, but I also love the pipeline and the ongoing demand and what I see in the funnel and when I look at Malloy and his team's conversion rates I'm optimistic by what's in backlog I'm also optimistic what's in pipeline.

Greg: And when I look at Molloy and his team's conversion rates, I'm optimistic about what's in the backlog; I'm also optimistic about what's in the pipeline. A couple of attributes I think that are important to understand in our backlog. First, over 95% of our backlog comes to us from our government customers and our public safety customers, and the majority of that is a direct relationship and a contractual one between us and an end customer. That is very important.

Speaker Change: Of attributes I think that are important to understand in our backlog first over 95% of our backlog comes to us from our government customers and our public safety customers. So and the majority of that is a direct relationship and a contractual one between Austin and end customer that is very important.

Greg: And secondly, as you think about our backlog, we entered the year, much like last year, in a position where about half of our revenues for the year, a little bit more than that, will come to us from our backlog. And with that strength combined with the pipeline strength, that's what informs our guide for our 6% growth. Exactly. Very helpful. Just quickly, Jason, sorry if I missed it.

Speaker Change: And secondly, as you think about our backlog we entered the year much like last year in a position where about half of our revenues for the year, but a little bit more than that will come to us from backlog and with that strength combined with the pipeline strength, that's what informs our guide for 6% growth exactly.

Speaker Change: Very helpful.

Speaker Change: Quickly, Jason sorry, if I missed it did you talk about free cash flow expectations in 2024, and any benefit from working capital with the Jabil agreement I know, sometimes that can have some transitional working capital that may be favorable so free cash flow and the potential benefit.

Jason: Did you talk about free cash flow expectations in 2024 and any benefit from working capital with the Jabil Agreement? I know sometimes that can have some transitional working capital that may be favorable. So free cash flow and the potential benefit. Given the 24 is an operate-in-place kind of steady agreement, the working capital benefits are minimal in terms of that agreement.

Jason: Yes, given the 24 is an operate in place kind of.

Jason: Steady agreement the working capital benefits are minimal in terms of that agreement.

Jason: That said, we do expect working capital improvement. We talked about inventory. Our outlook for operating cash flow is $2.2 billion. That's up from last year's record $2 billion. And within that operating cash flow, the contribution for CapEx continues to be 15% or less. So we're expecting another strong year of cash flow. Very helpful.

Jason: That said, we do expect working capital improvement, we talked about inventory our outlook for operating cash flow was $2 2 billion, that's up off of last year's record two 2 billion.

Jason: And within that operating cash flow the contribution for our Capex continues to be 15% or less.

Jason: So we are expecting another strong year of cash flow.

Joseph Cardoso: Thank you. The next question comes from the line of Joseph Cardoso with J.P. Morgan. Your line is now open.

Speaker Change: Very helpful. Thank you.

Speaker Change: The next question comes from the line of Joseph Cardoso with J P. Morgan. Your line is now open.

Greg: Hey, thanks for the question, guys. I just wanted to follow up on the last free cash flow question. I guess when I'm taking a look at it, it kind of implies that you're going to have a nice step up in free cash flow generation, which, combined with exiting 2023 with, I think, $1.7 billion of cash on the balance sheet, looks like you'll have a fair bit of dry powder. Can you just help us think about the appetite in 2024 to deploy cash for buyback every day? Like, should we be thinking about a more aggressive than typical nature? Any color would be appreciated.

Joseph Cardoso: Hey, Thanks for the question guys.

Joseph Cardoso: Just wanted to follow up on the last free cash flow question I guess when im taking a look at it kind of implies that youre going to have a nice step up in free cash flow generation, which in combination exiting 2023, I mean, I think $1 7 billion of cash on the balance sheet. It looks like you'll have a fair bit of dry powder can you just help us think about the appetite in 2014 to deploy cash buybacks.

Joseph Cardoso: Like should we be thinking about a more aggressive than typical nature.

Speaker Change: Any color would be appreciated thank you.

Greg: Thank you. Just in terms of capital allocation, we always think of it, and I love the fact that we have the balance sheet that we do. Jason, in his remarks, talked about 1.4 net debt to adjusted EBITDA.

Speaker Change: But just in terms of capital allocation, we always think of it and I love. The fact that we have the balance sheet that we do Jason in his remarks talked about one four net debt to adjusted EBITDA. So I love the the opportunity the flexibility that that gives us I am proud of the way we are good stewards of capital both return.

Greg: So I love the opportunity, the flexibility that that gives us. I'm proud of the way we are good stewards of capital, both returning it to the shareholder in share repo and dividend but being surgical and thoughtful in accretive acquisitions as well. So you think about this cash flow, and I always think about the wheel of 55-30-15, 55% of that cash flow is available for share repo or acquisition, fungible between the two, representative of the opportunities that come our way. 30% is dividends, and 15%, as Jason just referenced, is CapEx. Even though we made only one acquisition at the end of the year in IP video, it certainly wasn't reflective of the engagements that we had.

Speaker Change: It to the shareholder and share repo and dividend, but being surgical and thoughtful to accretive acquisitions as well. So you think about this cash flow and I always think the wheel of 50, $530 15, 55% of that cash flow is available for share repo or acquisition fungible between the two.

Presentative of the opportunities that come our way.

30% is dividend and 15% as Jason just referenced is capex.

Speaker Change: Even though we made only one acquisition at the end of the year and IP video.

Speaker Change: It certainly wasn't reflective of the engagements that we had.

Greg: I think there's a lot of opportunity. I love the fact that we have the organic opportunity, whether it's device refresh, public safety prioritization, ARPA funding, enterprise opportunity, video, and government. You know the opportunities that are in front of us organically, which are consequence. Similarly, I'm excited about acquisition opportunities that can make our portfolio stronger, particularly around either video software or services. So that's how we think about it.

Speaker Change: I think theres a lot of opportunity I love. The fact that we have the organic opportunities.

Speaker Change: Whether it's device refresh public safety prioritization.

Speaker Change: <unk> funding.

Speaker Change: Enterprise opportunity video and government you know the opportunities that are in front of us organically, which are consequential equally I'm excited about acquisition opportunities that can make our portfolio stronger.

Speaker Change: Particularly around either video software or services. So that's how we think about it. The other thing that was noteworthy in 'twenty three given the strength of our balance sheet is that we did earn an upgrade from Moody's to <unk>.

Greg: The other thing that was noteworthy in 23, given the strength of our balance sheet, is that we did earn an upgrade from Moody's to BAA2. And as Greg mentioned, we'll be in the debt markets this year, refinancing $1.3 billion. And so having taken note of that strength of the cash flow in 23, as well as our expectations in 24, that'll help us as we refinance.

Speaker Change: As Greg mentioned, we will be in the debt markets this year refi.

Speaker Change: Financing $1 3 billion and so.

Speaker Change: Having taken note of the strength of the cash flow in 'twenty, three as well as our expectations and 24 that'll help us as we refinance.

Speaker Change: No.

Speaker Change: The color there and then just for my follow up can we just get an update on Airwave I noticed in the press release.

Greg: And then, just for my follow-up, can we just get an update on Airwave? I noticed in the press release that it sounded like you guys have the option to file an application with the UK Courts of Appeal. Like, are you guys actually taking that step? Can you provide any color around that?

Speaker Change: It sounded like you guys have the option to file an application with the UK courts of appeal.

Speaker Change: Like are you guys actually taking that debt can you provide any color around that and then any color in terms of the next steps beyond the filing.

Greg: And then any color in terms of the next steps beyond the filing? And what other options you have at your disposal? Thanks for the question. Yeah, we will pursue the next step, which is appealing to the UK Court of Appeals. We anticipate doing that next week.

Speaker Change: And what other options you have at your disposal. Thanks for the question.

Speaker Change: Yes, we will pursue the next step which is appealing to the U K court of Appeals.

Speaker Change: We anticipate doing that next week.

Greg: I said all along, and we remain pretty consistent that this whole thing is beyond unique. We still believe it's unprecedented. We think it's legally flawed, but I'm not going to whine about it.

Speaker Change: I've said, all along and we remain pretty consistent that.

Speaker Change: This whole thing has is beyond unique.

Speaker Change: We still believe it's unprecedented we think it is legally flawed, but I'm not going to whine about it.

Greg: I'm consistent in our description. We're going to pursue all the avenues available to us to defend our position. So, to your point, that will be the filing of the appeal with the U.K. Court of Appeals next week. Unclear how long that will take. You know, probably several months, but that remains to be seen.

Speaker Change: Consistent in our description, we're going to pursue all the avenues available to us to defend our position. So to your point that will be the filing of the appeal to the U K Court of Appeals next week unclear, how long that will take.

Speaker Change: Probably.

Speaker Change: Several months, but that remains to be seen.

Greg: The only other thing I'd say is, in public commentary that has been made with the CMA and other parliamentary hearings, it's pretty obvious that they believe that Airwave will be needed well beyond 2026. The references have been made by different parties to either needing it through 2029 or 2030. So we will continue to move forward as best we can, engaging where we can, maintaining the investments that we need to make in this network, and customer service levels as high as they've ever been. And just as a reminder, our current backlog, with the adjustment we mentioned in Q4, has our contract with the UK Home Office through 2026. That's right; there's opportunity for us to serve that account beyond that. I appreciate the coverage, guys. Thanks. Thanks for all the questions.

Speaker Change: The only other thing I'd say is in public commentary.

Speaker Change: That has been made with the CMA and other parliamentary hearings.

Speaker Change: It's pretty obvious that they believe that airwave will be needed well beyond 2026. The references have been made by different parties to either needing it through 2029 or 2030.

Speaker Change: So we will continue to to.

Speaker Change: To move forward as best we can engaging where we can maintaining the investments that we need to make in this network.

Speaker Change: And customer service levels as high as they've ever been.

Speaker Change: And just as a reminder, our current backlog.

Speaker Change: The adjustment we mentioned in Q4 has our contract with the UK home office through 2026.

That's right there's opportunity for us to serve that account beyond that.

Speaker Change: No I appreciate the color guys. Thanks, Thanks for all the questions.

Tomer Zilberman: Thank you. The next question is from the line of Tomer Zilberman with Bank of America. Your line is now open.

Speaker Change: Thank you.

Speaker Change: The next question is from the line of Palmer Silberman with Bank of America. Your line is now open.

Greg: Hey guys, thank you for the question. I just wanted to start off with ARPA. Just wanted to get an update on how it contributed to orders this year and your expectations going into next year. I know you previously noted it was 5% contribution in 22 and I think you said in the first half of this year it was also 5%. Yeah, Tomer, that's consistent with what we've said before. I think that, you know, the key thing I would say as it relates to budgets right now is public safety. Number one, public safety spending. It continues to get prioritized. Number two, I've just scoured through the state and local budget drafts for 2025. By and large, the situation remains very solid. Even the states that have had an influx of immigrants have actually appropriated more dollars to public safety, which is interesting.

Palmer Silberman: Hey, guys. Thank you for the question just wanted to start off first with ARPA.

Palmer Silberman: Just wanted to get an update when it contributed to orders this year and your expectations going into next year. I know you. Previously noted it was 5% contribution in 'twenty, two and I think you said in the first half of this year was also 5%.

Speaker Change: Tomer that that's that's consistent with what we've said before I think.

Speaker Change: The key thing I would I would say as it relates to budgets right now as public safety number one continued public safety spend it continues to get prioritized number two I've just scour through the state and local budget drafts of 2025 by and large the situation remains very solid even the states that have had.

Speaker Change: An influx of immigrants have actually appropriated more dollars can public safety, which is interesting.

Greg: But, generally speaking, when we look at it, the budget situation, state and local, is very solid. Got it. And then maybe just as a quick follow-up, I know you've touched on backlog already, but curious how the duration of the backlog has improved in the last three months and, you know, maybe the start of this year. To begin this year, its duration is similar to slightly improved from the beginning of where we were entering last year. So the duration and the quality attributes of the backlog are as good or better than they were last year. Got it, thank you. The next question is from the line of Benjamin Bollin with Cleveland Research. Your line is now open. Good afternoon, everyone.

Speaker Change: But in generally speaking when we look at it the budget situation in state and local.

Speaker Change: It's very solid.

Speaker Change: Got it and then maybe just as a quick follow up I know you've touched on backlog.

Speaker Change: Already but curious how the duration of the backlog has improved in the last three months and.

Speaker Change: Maybe the start of this year.

Speaker Change: Yeah.

Speaker Change: To begin this year.

Speaker Change: Duration is similar to slightly improved from the beginning of where we were entering last year. So the duration and the quality attributes of the backlog are as good or better than they were last year.

Speaker Change: Got it thank you.

Speaker Change: The next question is from the line of Benjamin Bohlen with Cleveland Research. Your line is now open.

Ben Bollin: Good afternoon, everyone. Thanks for taking the question.

Ben Bollin: Thanks for taking the time to answer the question. Greg, a bigger picture question, you know, going into an election year, I'm curious how that has any impact, if at all, on how you guys think about 2024 in your top-line targets, and then a secondary question would be, Could you share your thoughts around the typical refresh that you see in these fixed video deployments and how you think about, you know, replacement versus net new placements in the wild and how that, you know, Thank you. Yeah, Ben, in terms of the election year, it's interesting. We always talk about this too.

Ben Bollin: Greg bigger picture question going into an election year curious how that has any impact if at all.

Ben Bollin: How you guys thought about 2024 and your top line targets.

Ben Bollin: And then secondary question would be.

Ben Bollin: Could you share your thoughts around that.

Ben Bollin: The typical refresh that you see in these fixed video deployment and how do you think about.

Ben Bollin: Placement versus net new placements in the wild.

Ben Bollin: That kind of comes together in that 10% figure that youre talking about for video growth. This year. Thank you.

Speaker Change: Yeah, Ben in terms of the election year, it's interesting we always talk about this too.

Greg: If you kind of look back over the history of this business... We do pretty well, irrespective of a Republican or a Democratic administration. So, you know, we've had great success in 2023. We expect to have another strong year this year. But when there's a presidential change, there's always some period of transition.

Speaker Change: If you kind of look back over the history of this business we.

Speaker Change: We do pretty well irrespective of a Republican or Democratic administration.

Speaker Change: So we've had great success in 2023, we expect to have another strong year this year.

Speaker Change: When there is a presidential change there is always some period of transition they'll typically operate under a continuing resolution, but in the main generally speaking we have a pretty solid foundational level of performance.

Greg: They'll typically operate under a continuing resolution. But in the main, generally speaking, we have a pretty solid foundational level of performance, with a kind of low beta risk, given the backlog and the continual high-priority demand of public safety. On fixed video, and we, you know, we talked about it, Jason articulated the 10% target for this year. Look, I actually like the fact that we have the width and breadth of the portfolio that we do. So we have the broadest portfolio in video, fixed or mobile, prem or cloud, and we can meet the customer wherever they want to be met to buy. Most of our customers have both cloud and prem. If, in fact, there's a notable acceleration of cloud adoption, which we've seen and we are seeing that moves more toward the cloud, that's great.

Speaker Change: With kind of low beta risk.

Speaker Change: Given the backlog and the continual high priority demand in public safety.

Speaker Change: Yes.

Speaker Change: On fixed video and we talked about Jason articulated.

Speaker Change: The 10% target for this year look I actually <unk>.

Speaker Change: The fact that we have the width and breadth of the portfolio that we do so we have the broadest portfolio in video fixed or mobile.

Speaker Change: <unk> or cloud.

Speaker Change: And we can meet the customer wherever they want to be met by most of our customers have both cloud and Prem if in fact.

Speaker Change: There is a notable acceleration of cloud adoption, which we've seen and we are seeing that moves more toward cloud that's great. If that moderates the topline growth from 15 to 10, that's okay too because.

Greg: If that moderates the top-line growth from 15 to 10, that's okay, too, because that's where we're going to be in the next five to 10 years. So we're going to be able to meet the customer's expectations....Revenue, the stickiness with the customer relationship. And as Molloy said, he and we still believe we're taking shares. So we feel good about the position.

Speaker Change: Yeah.

Speaker Change: From a revenue the stickiness with the customer relationship and as Malloy said.

Speaker Change: He and we still believe we're taking share so.

Speaker Change: We feel good about the position and.

Jack: In terms of refresh on cameras, Jack, maybe you want to talk about that? Yeah, Ben, it obviously varies if they're citywide deployments, meaning outside cameras, you start to see a replacement cycle of anywhere to, you know, kind of three to five years on the networks that we manage. Internally, those upgrades are more driven by the R&D investments that Maheshan and the Maheshan team have made around analytics. I would note one thing, the acquisition we made in Pelco; we were actually very pleased in 2023 with the growth that Pelco had. But as we think about competitive VMSs that are out there, the work that we have ahead of us this year is to go out and leverage our Pelco portfolio to drive new opportunities in the camera replacement cycle.

Speaker Change: In terms of refresh on cameras, Jack maybe you want to talk about that yeah Ben.

Speaker Change: It obviously varies if theyre citywide deployments, meaning outside cameras, you start to see a replacement cycle of anywhere to kind of three to five years and the networks that we manage internally those upgrades are more driven by the R&D investments that nation team have made around analytics I would note one thing.

Speaker Change: Acquisition, we made in telco, we are actually very pleased in 2023 with the growth that <unk> had but as we think about competitive vms as that are out there. The work that we have ahead of US. This year is to go and leverage our telco portfolio to drive to drive new opportunities in the camera replacement cycle.

Jack: Just one more thing to add to that is, just to support our ALTA growth with video, one of our initial acquisition targets was just the ability to expand the camera portfolio that ALTA supports. And something that we did towards the end of last year was to expand the entire 86SL line, which is one of the more popular within the Avigilon camera family. Now that is entirely supported within ALTA video, and I think that's also going to help with the refresh cycles and also help with some of the transition to the cloud. Unity 8, we introduced that last year, and one of the special things about it is that it's not just an on-premise solution.

Speaker Change: Just one more thing to add to that is.

Just to support our ultra growth.

Speaker Change: With video.

Speaker Change: One of our initial acquisition thesis was just the ability to expand the camera portfolio that also supports and something that we did towards the end of last year was to expand the entire <unk> line, which is one of the more popular.

Speaker Change: Within the average Joe on camera family now that is entirely supported Ulta video and I think that's also going to help with the refresh cycles and also helped with.

Speaker Change: Some of the transition to cloud unity eight we introduced that last year and unity eight one of the special things that it's not just an on Prem solution. It's actually an on Prem solution that can bridge into the cloud as well so as we think about those transitions the boundary between on Prem and cloud is a bit fuzzy.

Jack: It's actually an on-premises solution that can bridge into the cloud as well. So as we think about those transitions, the boundary between on-premises and cloud is a bit fuzzy, and I think in a good way for us. Thanks, guys. Thank you. Thanks, Ben. The next question comes from a line Keith Housum with North Coast Research; your line is now open. And a great job for the quarter and for the year. Again, a question for you on the IP video acquisition.

Speaker Change: In a good way for us.

Speaker Change: Thanks, guys.

Speaker Change: Thank you thanks Ben.

Speaker Change: The next question comes from the line of Keith <unk>.

Keith: With Northcoast research your line is now.

Keith: And great job on the quarter.

Keith: Year.

Keith: Question for you on the IP video acquisition preface walk us through some of the rationale for the acquisition and perhaps where you see some of the cross selling opportunities and growth opportunities going forward.

Keith Housum: Perhaps we could walk through some of the rationale for that acquisition and perhaps where you see some of the cross-selling opportunities and growth opportunities going forward. Sure. So the Halo video sensor, or the Halo sensor, is actually not a new thing for us.

Keith: Okay.

Speaker Change: Sure. So the Halo video sensor are healthy Halo sensor.

Speaker Change: It's actually not a new thing for us.

Speaker Change: Vituline has partnered with with IP video for quite some years, we have actually been reselling the IP video solution.

Jack: Avigilon has partnered with IP Video for quite some years, and we have actually been reselling the IP Video solution. And the key reason for that is that there are plenty of situations, like in schools, where video cannot be used in certain locations, but these sensors can. So think of it as the detection of smoking vape sensors, et cetera, in bathrooms, in areas where we typically do not install cameras, but which are becoming quite important from a security and a safety standpoint.

Speaker Change: And the key reason there is that there are plenty of situations like in schools.

Speaker Change: <unk> video cannot be used in certain locations, but these sensors can so think of it as the detection of Bob.

Speaker Change: Smoking vape sensors et cetera in bathroom, so in areas, where we typically do not installed cameras, but.

Speaker Change: Quite important from a security and a safety standpoint.

Jack: Halo is sort of the leading sensor when it comes to air quality, vape sensing, and audio analytics, including gunshot detection. And so, as we think about really expanding our capability within education and beyond, this was just a natural fit for us to bring in and integrate more closely with our Unity and Alta platforms. The only thing I'd add to that, just in terms of crossing out, would be that they've done very well in education. It's our role to get in and expand that business into healthcare, into workplaces, into transit areas where you have issues with people smoking and those kinds of things as well. We think we've got the relationships to extend into those markets as well. It makes sense.

Speaker Change: <unk> is sort of the leading sensor when it comes to air quality Vapes.

Speaker Change: Vape fencing audio analytics, including gunshot detection.

Speaker Change: So as we think about really expanding our capability within education and beyond and this was just a natural fit for us to bring in and integrate more closely with our.

Speaker Change: Unity and ultra platforms.

Speaker Change: Yeah, the only thing that and just in terms of cross sell would be that.

Speaker Change: They've done very well in education, it's our role to get in and expand that business into health care into workplaces into transit areas, where you have issues with people smoking and those kind of things as well, we think we've got the relationships to extend into those markets as well.

Speaker Change: Okay makes sense its helpful. I appreciate it.

Keith Housum: It's helpful, and I appreciate it. Um, as a follow-up question, changing gears slightly here, you know, another conversation on PCR, and I know there's been moving pieces throughout the year in terms of, you know, getting out of, you know, some of the areas like Asia, but perhaps just give an update on where PCR stands. I know there were also some issues with the supply chain earlier in the year. Um, any update would be helpful there.

Speaker Change: So a question changing gears slightly here.

Speaker Change: Conversation on PCR and I know, there's been some moving pieces throughout the year in terms of getting out of some of the areas of Asia, perhaps has given an update on where PCR stands I know there's been also some issues with supply chain earlier in the year.

Speaker Change: It would be helpful. There. Thanks.

Greg: Thanks. Yeah, PCR actually did great in 23, Keith, about $1.1 billion of revenue last year, and it was a record for full year 23. So the performance by that team was exceptional, and I would expect PCR to be at comparable levels this year. That's incorporated into the LMR mid-single digit technology growth, or actually high single digit when you normalize for airwave. So PCR is quite resilient and doing well.

Speaker Change: Yes, PCR actually did great in twenty-three Keith.

Speaker Change: About a $1 1 billion.

Speaker Change: Revenue last year.

Speaker Change: And it was a record in full year 'twenty three.

Speaker Change: So the performance by that team was exceptional.

Speaker Change: And I would expect PCR to be comparable levels. This year, that's informed into the LMR mid single digit technology growth are actually high single digit when you normalize for Irwin, So PCR is quite resilient and doing well.

Greg: Great, much appreciated. Thank you. You bet. The next question comes from the line of Louis de Palma with William Blair. Your line is now open. Greg, Jason, Jack Mahesh, and Tim, good afternoon. Louie, how are you doing?

Speaker Change: Great I appreciate it thank you.

Speaker Change: You bet.

Speaker Change: The next question comes from the line of Louis Dipalma with William Blair. Your line is now open.

Speaker Change: Okay.

Louis Dipalma: Greg, Jason Jack Mahesh and Tim and good afternoon.

Louis Dipalma: Louie how are you doing.

Louis de Palma: Doing, doing great. I was wondering, does Google bring any special benefits for partnering with them for Alta versus the other major cloud providers? I know you have, I think, a partnership with Azure for your command center business. Yeah, so to begin with, Avigilon Alta video is already on Google Cloud today. And this is really a scale story, and especially a scale story around some key vectors, for example, AI.

Louis Dipalma: Doing doing great I was wondering does Google bring any special.

Louis Dipalma: <unk> for partnering with them or for Alta versus the other.

Louie: Major cloud providers I know you have I think a partnership with <unk> for your command Center business.

Louie: Yes.

Louie: To begin with <unk>.

Louie: Vigilant also video is already on Google cloud today.

Louie: And this is really a scale story and especially of scale around some key vectors for example, AI.

Jack: And so as we think about expanding Alta geographically, as we think about expanding Alta and more broadly, video across our capability set, AI was important, mapping capabilities were important, low latency data delivery, and video delivery was important. And we thought that Google would be a good partner as we expand our installation, our capability of deploying within Google Cloud. In terms of sort of a broader comment on this, look, there's lots of stuff happening in the cloud world today, whether that's on the AI side, core cloud services, etc.

Louie: And so as we think about.

Louie: Expanding Alta geographically as we think about expanding Alta more broadly video across.

Louie: Our capability set.

Louie: I was important mapping capabilities was important low latency data delivery video delivery, what's important and we thought that Google would be a good partner as we expand our installation of our capability of deploying within Google cloud.

Louie: In terms of sort of more a broader comment on this.

Louie: Look there is lots of stuff happening in the cloud world today, whether thats on the AI side core cloud services et cetera, and we wanted to be able to provide our customers with the best perf.

Jack: And we want to be able to provide our customers with the best performance at the best price point. And so this Google partnership is really part of our multi-cloud strategy at the end of it all. So that's really what drove it.

Louie: Performance at the best price point, and so the Google partnership.

Louie: It's really part of our multi cloud strategy at the end if at all so that's really what drove it.

Speaker Change: Great and R&D economics significantly different for Alta versus unity or are you actively pushing for one.

Jack: Great. And are the economics significantly different for Alta versus Unity? Are you actively pushing for one instead of the other?

Speaker Change: Instead of the other.

Jack: We're positioned to offer our customers a choice, as Jack mentioned. We have growth expectations for both Unity, the on-premises, as well as Alta. Customers like those in education, as we mentioned on the call, are increasingly choosing Alta. The difference between the two is really how the VMS or software layer is delivered.

Speaker Change: We're positioned to offer our customers a choice as Jack mentioned, we have growth expectations for both unity the on Prem as well as Alta customers like those in education, and we mentioned on the call are increasingly choosing Alta the difference between the two is really how the vms or software.

Jack: In the case of Alta, the VMS is delivered and deployed through the cloud under a term license, while in the case of Unity, it's on-premises and more of a perpetual with a maintenance arrangement. So, those are the two models we have, Jack. Customers are... Yeah, two things there, Louis. The purchase decision remains very dynamic up until the last, you know, call it two to three weeks of a decision. But it's interesting, as we look at win-loss data, one of the interesting things is that we've had competitors who are more point solution providers who have been eliminated from decisions, and we've had both Alta and Unity as finalist decisions, which, again, I think speaks to the breadth and the advantage that that gives us in the marketplace. And, Louis, while the customer decides, it's not so much what we push; it' And as Jack said, many customers deploy both.

Speaker Change: Layers delivered in the case of all to the BMS is delivered and deployed through the cloud.

Speaker Change: Under a term term license and in the case of unity, it's an on prem in more of a perpetual.

Speaker Change: With the with our maintenance arrangements. So those are the two models, we have Jack customers are yet to things there Louis as the the purchase decision remains very dynamic up until the last call. It two to three weeks of a decision, but it's interesting as we look at win loss data one of the interesting things is that we've had competitors who are.

Speaker Change: More point solution providers, who have been eliminated from decisions and we've had both both alter both all 10 unity as finalists decisions, which again I think speaks to the breadth and the advantage that gives us in the marketplace and Louis while the customer decides it's not so much what we push it's what they want and as Jack said many customers deployed.

Speaker Change: They deploy both.

Louis de Palma: Cloud-fixed video is smaller in our overall revenue contribution than prem-fixed video, but it's noteworthy to say that the growth of cloud-fixed video is a strong multiple of the prem solution. Yeah, is there increasing momentum for Alta? I think you mentioned how 25% of the growth for 2023 with video is from Alta. Do you think that 25% is going to increase to 35% or something like that in 2024? I don't know.

Speaker Change: Cloud fixed video is smaller from our overall revenue contribution than trend fixed video, but it's noteworthy to say that the growth.

Speaker Change: Of cloud fixed video as a strong multiple of the Prem solution.

Speaker Change: Yeah is there increasing momentum for them.

Speaker Change: Also I think you mentioned, how 25% of the gorilla for 2023 with him and he was from also do you think that 25% is going to increase to 35% or something like that in 2024.

Speaker Change: I don't know it depends on what 'twenty <unk> growth composition, ultimately ends up being but what I will say is the cloud solution in our case Alta.

Greg: It depends on what 24's growth composition ultimately ends up being. But what I will say is the cloud solution, in our case, Alta, is growing significantly faster than Prem. So it's hard to predict the composition at the end of year 24 until we see how things settle. That's it. That's all I have.

Speaker Change: Is growing significantly faster than prem so it's hard to predict the competition. The composition at the end of year 2004 until we see how things settle.

Speaker Change: That's right that's all I had thanks, everyone.

Louis de Palma: Thanks, everyone. Thank you, Louie. Once again, if you have a question, you may press star 5 on your telephone keypad. Our next question comes from the line of Meta Marshall with Morgan Stanley. Your line is now open. Hey everyone, you've got Jamie on for META.

Speaker Change: Thank you Laurie.

Speaker Change: Once again, if you have a question you May press star five on your telephone keypad.

Speaker Change: Our next question comes from the line of meta Marshall with Morgan Stanley. Your line is now open.

Speaker Change: Hey, everyone you've got Jamie on for me to I appreciate you taking the time.

Jamie: Similar to one of the earlier questions and understanding that you're still seeing strong growth and some impressive winds in the corridor, the Q4 growth and accompanying 2024 outlook and command center just looked a little bit lower than what we've been modeling. So I guess, is there any additional detail you can provide as to what you're seeing there and what's driving that outlook for 2024? And then, as a follow-up, how should we think about the contribution from pricing broadly in the growth outlook for 2024?

Similar to one of the earlier questions and understanding that youre still seeing strong growth in some impressive wins in the quarter.

Meta A. Marshall: The Q4 growth in the company in 2020 for outlook and command Center, just looked a little bit lower than what we've been modeling. So I guess is there any additional detail you can provide as to as to what youre seeing there and what's driving that outlook on 24, and then as a follow up how should we think about the contribution from from pricing broadly in the growth outlook for 'twenty four.

Greg: Oh, and maybe we can tag team this, but Command Center, that's another one I was particularly proud of, because we grew 21% for the year. Now, obviously, Rave was a key driver in that, and Rave has turned out to be a great acquisition for us, actually exceeding its business case. If you take that out, Jamie, and you normalize for organic growth, the organic growth is another solid year of 10% growth. And by the way, that's inclusive of the growth of a $25 million headwind that actually represents the transitioning out of ESN. So when you think about the overall 10% growth of command centers, you do have to include the normalization of the exit of ESN that's worth $25 million, but growth remains pretty strong in that segment as well.

Speaker Change: And maybe we can tag team. This with command center. That's another one I was particularly proud of because we grew 21% for the year now obviously rave.

Speaker Change: Was the key driver in that in rave has turned out to be a great acquisition for us actually exceeding its business case.

Speaker Change: You take that out Jamie and you normalize for organic growth the organic growth is another solid year of 10% growth and by the way.

Speaker Change: That's inclusive.

Speaker Change: Of the growth of a $25 million headwind that actually represents the transitioning out of ESN. So when you think about the overall, 10% growth of command Center you do have to include the normalization of the of the exit of ESN, that's worth $25 million, but.

Speaker Change: Growth remains pretty strong in that segment as well and in terms of.

Jason: And in terms of growth drivers for 24, we would expect growth from both volume and price, inclusive of ASPs continuing to grow as they did in 23 as our customers adopt more of the feature-rich part of the portfolio, including Apex Next and other parts of the portfolio. We would expect that to continue, and that's included in our growth expectations. Great, thank you so much for your time.

Speaker Change: Growth drivers for 'twenty, four we would expect growth from both volume and price inclusive of Asps continuing to grow as they did in 2003 as our customers adopt more of the feature rich part of the portfolio, including apex next and other parts of the portfolio. We would expect that to continue and that's included in our growth expectations.

Speaker Change: Great. Thank you so much for the time.

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

Speaker Change: Thanks, Jamie.

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

Greg: Listen, thank you for dialing in and listening. I would just close by saying that, as we're entering 2024, or in it now in February, it's pretty clear that public safety and enterprise security have never been more important. I love the fact that we've got the broadest and most comprehensive product portfolio. I like the fact that as customers move to a more notable adoption of cloud acceleration, we're able to capitalize on that with our Alta solution. I love the fact that we have the apex next refresh cycle, in particular, continue to march forward, and that remains robust.

Gregory Q. Brown: Yes, thanks listen thank you for dialing in and listening.

Gregory Q. Brown: I would just close by saying that.

Gregory Q. Brown: I think as we're entering 2024 or in it now in February it's pretty clear that public safety and enterprise security.

Gregory Q. Brown: I've never been more important our loved the fact that we've got the broadest and most comprehensive product portfolio.

Gregory Q. Brown: The fact that as customers index to a more notable adoption on cloud acceleration, we're able to.

Gregory Q. Brown: Capitalize on that with our ultra solution I Love. The fact that we have the apex next refresh cycle in particular continue to March forward and that remains robust and as was mentioned on the call I am, particularly excited about our partnership with Google.

Greg: And as was mentioned on the call, I am particularly excited about our partnership with Google. For all of the Motorola employees listening in on the call, I'm really proud of you. I'm proud of our team's execution in 23.

Gregory Q. Brown: For all of the Motorola is listening in on the call I'm really proud of you I'm proud of our team's execution in 'twenty, three and I'm anticipating another strong year in 2024 and I. Appreciate everything you are doing I look forward to catching up and talking with you and debriefing in a quarter. Thanks again for all the great work.

Greg: And I'm anticipating another strong year in 2024. And I appreciate everything you're doing. I look forward to catching up and talking with you and debriefing in a quarter.

Unnamed: Thanks again for all the great work. Ladies and gentlemen, this does conclude today's teleconference. A replay of the call will be available on the internet within three hours. The website address is www.motorolasolutions.com slash investor. We thank you for your participation. We ask that you please disconnect your lines at this time.

Speaker Change: Ladies and gentlemen, this does conclude today's teleconference. A replay of the call will be available over the internet within three hours. The website address is www dot Motorola solutions Dot com slash investor. We thank you for your participation and ask that you. Please disconnect your lines at this time.

Speaker Change: Okay.

Speaker Change: [music].