Motorola Solutions, Inc. (NYSE:MSI) Q3 2023 Earnings Call Transcript

Greg Brown : And Tom, I think you said 5% per video, as Jack said.

John Molloy : Actually 8%, over 33%.

Greg Brown : 33% comp. In terms of the segment, S&S, of 5, I remind you that includes the decrement and deferral of Airwave revenue, which is important and compresses that. But at the same time, we continue to have great performance in command center software with the strong print for Q3. We have strong managed services performance and something that’s not even reflected in Q3 is Denmark. And Molloy’s team did a fabulous job on a multiyear project and multiyear managed services contract to close on Denmark. So I think that also should inform how you interpret the S&S performance.

Tomer Zilberman : Got it. And if I can just follow up. In terms of your 4Q and your fiscal guidance, I’m sure this is just something more with language than anything your 4Q guidance of 4% implies the higher end of your revamped fiscal guidance, while the low end of your fiscal guidance would imply around 3.5% growth for 4Q. So can you just talk about what would draw — what could happen that would draw that incremental 0.5 point weakness?

Greg Brown : Yeah. I think what I would say, Tomer, is I kind of focus on the approximately 4%. I understand the math differences of how you disaggregated it. But we’re looking and anticipate 4% revenue growth for Q4. By the way, that’s in the face of $105 million of headwind for Q4, $50 million, which is the Airwave deferral that’s in that growth, $40 million, which is the business — light business model, change that we informed you on a couple of months ago, a couple of quarters ago. And there’s $15 million of additional FX headwinds. So the 4% is actually a pretty healthy quarter that we’re pretty proud of, and that’s why we’re raising the full year accordingly as well.

Tomer Zilberman : Great. Thank you.

Greg Brown : Thanks, Tomer.

Operator: The next question comes from the line of Meta Marshall with Morgan Stanley. Your line is now open.

Meta Marshall : Great, thanks. I just wanted to dive into a couple of your comments on the call. You guys noted that Rave was doing very well. Is that more customers coming on? Is that you’re able to kind of cross-sell it, upsizing other products along with it. Just kind of where some of that Rave strength coming from. And then maybe on the federal side as well, I noted you talked about the $75 million P25 deal, but just — is that a broadening of agencies, just faster refreshes, just kind of commentary on the two sources of upside this quarter would be helpful. Thanks.

Mahesh Saptharishi : Just to start out with on the integration piece, we announced a quarter ago, I believe, at this point, where we are bundling Rave with all our new Vesta offers going forward. There’s an integration between our call handling solution and Rave as well. We have deeper penetration into the education market with our integration with Orchestrate and with our Video solutions, panic button being a big part of it. We integrated the Panic Button Rave elements with Aware, the command center Aware, for real-time prime center. So all of that acts as a very positive synergy, and I think that helps with the really accelerating rate adoption across the board.

John Molloy : As it relates to federal, we’re having a record year. And as you know, the federal government closed just occurred September 30. We’re seeing it, it’s broad-based. It’s Department of Defense. It’s civil, it’s law enforcement, it’s multiyear. So we’re really pleased with what happened in federal. And then when you start to think about some of the federal supplemental requests, one of the items in there is $106 billion for the critical national security, which is going to fund Ukraine and Israel. What I would highlight is during the course of this year, we’ve actually shipped $100 million into Ukraine, a little greater than $100 million at this point in time. So as you think about it, everything related to federal, Joe Balchen, John Zidar and their team have really done a job we’re really pleased with.