Motorola Solutions, Inc. (NYSE:MSI) Q1 2023 Earnings Call Transcript

Mahesh Saptharishi: And I would also mention other parts of the portfolio, TETRA, PCR are areas where we have focused and have exciting products coming to market and receptive customers to those as well. So, we are at an important point in the targeted investments we made in and through COVID that are now producing those exciting products are also an important part of our growth drivers.

Greg Brown: And on Rave, Rave has exceeded our initial expectations for performance. We see strong traction in education, especially higher ed, but also K-12. And as we previously talked about, Rave bridges enterprise security with public safety and with some of the initiatives that we have undertaken recently, we are making the bridge wider effectively allowing for more data and at a faster rate to go from enterprise security to public safety. So, two specific examples worth mentioning there, first, with every one of our new VESTA 911 orders, we are actually bundling Rave 911 suite. And what that includes is two-way texting, caller profile. This is information about individuals who perhaps need special assistance, facility info, which is blueprints a facility so that responders can respond with greater information as to what to see – what they will see when they get to the facility and very importantly, caller location.

And that is going to be part of our Rave VESTA 911 offer going forward. The second is we are integrating more closely with our enterprise security solution. So, Orchestrate is a key enabler for that. And as part of our full Safety Reimagined program, we are bringing Rave much closer in terms of the ability to detect and the ability to alert using Rave alert and the ability to bridge into 911 as appropriate. So, those two together is really augmenting our path forward in terms of taking advantage of our strength in education, along with our presence with PSAPs.

Meta Marshall: Great. Thanks.

Operator: The next question comes from the line of Sami Badri with Credit Suisse. Your line is now open.

Sami Badri: Alright. Thank you. I had a couple of questions, some of the modeling, some of the business dynamics. I will start with business dynamics first. So, one on the backlog, so there obviously are a lot of big deals. And maybe you could give us a characterization of how many of these bigger deals are expected? And then maybe taking that question a step further is if we excluded FX impact and excluded big episodic activity, are you still seeing the backlog step up, right, with more of these – your standard business motion? And then I have a follow-up.

Jack Molloy: Sami, I think I would address your inquiry. We have seen strong demand not only big deals, but also the usual type and profile of our business. And I would point to duration. While our backlog is up and at record levels, the duration of our backlog is similar to slightly better than it was last year and it was last quarter. So, not only are we growing backlog, the opportunities we have to convert that backlog within the year are slightly better. So, that’s one of the reasons that, again, with our expectations going up for the year, it’s driven by that backlog position.

Greg Brown: And backlog is up in the unfavorable FX to your other point of $370 million. By the way, the other thing, Sami, is even when we have a large product, much like the Air Force we talked about earlier on the call, it’s a $340 million 10-year order, only $11 million of that is logged in backlog. So, I like the composition and the duration of the backlog in addition to it being absolute and at record levels as we exit Q1.

Sami Badri: Got it. Thank you for that. Also, Greg, Jason, if you guys could give us any kind of idea on all video revenue growth targets for 2023. And also, we appreciate the new breakout of the Avigilon segment.

Jason Winkler: So, our expectations for total video remain approximately 15%. That’s consistent with our last call. And as Jack mentioned, that growth will be even better in some of our power verticals, which represent over half of the composition of the revenue. So, video is performing to our expectations. And then Sami, to your observation of Greg’s comments around our portfolio around Alta and Unity, that’s a market-facing change that we will represent the brands and Jack’s sales team is positioned to sell video. We are in a great position to sell it either in an on-prem version, which is the way most customers buy today, but also in a cloud version. And as markets move, we are positioned extremely well.