Operator: Thank you. The next question is from the line of Tomer Zilberman with Bank of America. Your line is now open.
Tomer Zilberman: Hey, guys. Thank you for the question. Just wanted to start off first with ARPA. I 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 ’22 and I think you said in the first half of this year was also 5%.
Greg Brown: Yeah, Tomer. That’s consistent with what we’ve said before. I think that the key thing I would say as it relates to budgets right now is public safety number one, continues — public safety spend continues to get prioritized. Number two, I’ve just scoured through the state and local budget drafts of 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. But in generally speaking, when we look at it, the budget situations in state and local is very solid.
Tomer Zilberman: Got it. And then maybe just as a quick follow-up. I know you touched on backlog already, but curious how the duration of the backlog has improved in the last three months and maybe the start of this year?
Jason Winkler: To begin this year, its duration has 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.
Tomer Zilberman: Got it. Thank you.
Operator: The next question is from the line of Benjamin Bollin with Cleveland Research. Your line is now open.
Benjamin Bollin: Good afternoon, everyone. And thanks for taking my question. Greg, bigger picture question. Going into an election year, curious how that has any impact if at all on how you guys thought 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 the fixed video deployment and how you think about replacement versus net new placements in the wild and how that kind of comes together in that 10% figure that you’re talking about for video growth this year? Thank you.
Greg Brown: Yeah. Ben, in terms of the election year, it’s interesting, we always talk about this too. If you kind of look back over the history of this business, we do pretty well, irrespective of the Republican or Democratic administration. So we’ve had great success in 2023, we expect to have another strong year this year. When there is a Presidential change, there is always some period of transition, they will typically operate under a continuing resolution. But in the main, generally speaking, we have a pretty solid foundational level of performance with kind of low beta risk, given the backlog and the continual high priority demand in public safety. On fixed video and we talked about 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 that there is a notable acceleration of cloud adoption, which we’ve seen and we are seeing that moves more towards cloud, that’s great. If that moderates the top line growth from 15% to 10%, that’s okay too. Because [Technical Difficulty] revenue, the stickiness with the customer relationship and as Molloy said, he and we still believe we’re taking share. So we feel good about the position. In terms of refresh on cameras, Jack, maybe you want to talk about that.
Jack Molloy: Yeah. Ben, it obviously varies if there city wide deployments, meaning outside cameras, you start to see a replacement cycle of anywhere kind of three to five years in the networks that we manage. Internally, those upgrades are more driven by the R&D investments that Mahesh and team have made around analytics. I would note one thing, the acquisition we made in telco, we’re actually very pleased in 2023 with the growth that Telco 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 and leverage our telco portfolio to drive — to drive new opportunities in the camera replacement cycle.
Mahesh Saptharishi: Just one more thing to add to that is just to support our Alta growth with Video, one of our initial acquisition thesis 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 H6SL 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 cloud. Unity8, we introduced that last year. And Unity8, one of the special thing about it is, it’s not just done on-prem solution, it’s actually an on-prem solution that can bridge into the cloud side as well. So as we think about those transitions, the boundary between on-prem and cloud, it’s a bit fuzzy and I think in a good way for us.
Benjamin Bollin: Thanks, guys.
Greg Brown: Thank you. Thanks, Ben.
Operator: The next question comes from the line of Keith Housum with Northcoast Research. Your line is now open.
Keith Housum: Good afternoon guys. And great job on the quarter and for the year. Guys, question for you on the IPVideo acquisition. Perhaps just walk us through some rationale for that acquisition and perhaps where you see some cross-selling opportunities and growth opportunities going forward?
Jason Winkler: Sure. So the HALO Video sensor, our [health HALO] (ph) sensor is actually not a new thing for us. We have — Avigilon had partnered with IPVideo for quite some years. We’ve actually been reselling the IPVideo solution. And the key reason there 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 become quite important from a security and a safety standpoint. HALO is sort of the leading sensor when it comes to air quality, vape sensing, audio analytics including gunshot detection. And so as we think about really expanding our capability within education and beyond, this is just a natural fit for us to bring in and integrate more closely with our Unity and Alta platforms.
Greg Brown: The only thing I’d add on that, just in terms of cross sell 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 kind of things as well. We think we’ve got the relationships to extend in those markets as well.
Keith Housum: Okay. Makes sense. Helpful. I appreciate it. Small question, changing gears, slightly here. No 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 like Asia, but perhaps just give an update on where PCR stands and I know there was also some issues with supply chain earlier in the year. Any update would be helpful there. Thanks.
Greg Brown: Yeah. PCR actually did great in ’23, Keith. About a $1.1 billion of revenue last year. It was a record in full year ’23. So the performance by that team was exceptional and I would expect PCR to be comparable levels this year. That’s informed 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.
Keith Housum: Great. Much appreciated. Thank you.
Greg Brown: You bet.
Operator: The next question comes from the line of Louie DiPalma with William Blair. Your line is now open.
Louie DiPalma: Greg, Jason, Jack, Mahesh and Tim, good afternoon.
Greg Brown: Louie, how you doing?
Louie DiPalma: 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 partnership with Azure for your Command Center business.
Jack Molloy: Yeah, Louie. So, to begin with, Avigilon Alta Video is already on Google Cloud today. And this is really a scale story and especially a scale around some key vectors, for example, AI. 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 was important, low latency data delivery, 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 more 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, et cetera.
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.
