The operator introduces the Motorola Solutions' Third Quarter 2023 Earnings Conference Call, while the Vice President of Investor Relations, Tim Yocum, welcomes the participants and introduces the CEO, CFO, COO, and CTO. The company has posted an earnings presentation and news release on their website and will be referencing non-GAAP financial results. The call will include forward-looking statements, but actual results may differ due to various risks and uncertainties.

The paragraph discusses the factors that can cause differences in earnings and provides sources where this information can be found. It also highlights the company's strong performance in Q3, with revenue and earnings exceeding guidance. The company's investments in safety and security have resulted in record orders and backlog. The company is also raising its full year guidance for sales and EPS for the third time this year.

In the third quarter, GAAP operating earnings were $639 million, up from 15.7% in the previous year due to a fixed asset impairment charge. Non-GAAP operating earnings were $741 million, a 10% increase from the previous year. GAAP earnings per share were $2.70, up from $1.63, while non-GAAP EPS was $3.19, a 6% increase. Operating cash flow and free cash flow also saw significant increases from the previous year. In the Products and SI segment, sales were up 5%, driven by growth in both LMR and video, with currency tailwinds and acquisitions contributing to the increase.

The operating earnings for the Product segment increased to $420 million or 26.1% of sales, driven by higher sales, lower direct material costs, and improved operating leverage. The segment also saw some notable wins and achievements, including large orders for P25 devices and software and services. In the Software and Services segment, revenue was up 12%, with notable highlights including a large service agreement and orders for command center and body-worn cameras. North America and International regions both saw growth in revenue, with North America up 6% and International up 13%.

In the third quarter, the company saw a record backlog of $14.3 billion, a 6% increase from the previous year, driven by strong demand in North America. However, there was a slight decrease in backlog compared to the previous quarter due to unfavorable currency rates and the recognition of Airwave revenue. In the Products and SI segment, backlog increased by 1%, while in the Software and Services segment, it increased by $702 million, primarily due to strong demand for multiyear contracts. Looking ahead, the company expects a 4% sales growth and non-GAAP EPS between $3.60 and $3.65 for the fourth quarter. For the full year, the revenue and earnings guidance have been increased, with an expected revenue range of $9.93 billion to $9.945 billion and non-GAAP EPS between $11.65 and $11.70. This outlook takes into account $40 million of FX headwinds, a weighted average diluted share count of 172 million shares, and an effective tax rate of 23%.

Motorola Solutions had a strong third quarter with growth in their LMR, Video, and Command Center businesses. The acquisition of Rave exceeded expectations and the company has successfully navigated supply chain challenges, resulting in cost savings and margin expansion. The company's Q3 results highlight the durability and criticality of their business and they have achieved record operating earnings, cash flow, and backlog. The company's strong cash flow allows for flexibility in deploying capital, and they have already repurchased $800 million in stock. Motorola Solutions also has a healthy balance sheet and is well-positioned for future investments.

The company is well-positioned for continued growth as demand for their solutions remains strong and their teams continue to execute at a high level. The addition of Rave has contributed to the success of the Command Center and Software side, potentially through cross-selling opportunities. The company's backlog is still at a record high, which is impressive compared to other companies. The CEO expresses confidence in the acquisition of Rave and the performance of the company since its addition.

Mahesh Saptharishi, CEO of Motorola Solutions, expects the company's growth to be 20% for the full year. The core platforms, such as NG-911, CAD, and Records Aware, are doing well. Rave, a mass notification system, has exceeded expectations and is being adopted by Arizona as the 15th state. The company's backlog is strong, with 95% of it coming from government customers. Specific guidance for 2024 will be given in February.

The speaker discusses the estimated revenue of $10.5 billion and potential revenue headwinds of $250 million, primarily due to the UK home office and the deferral of Airwave. He also mentions anticipated FX headwinds of $50 million and plans to provide more details in February. The speaker then addresses a question about the UK and states that there is no update on the CAD tribunal process and they are still awaiting a response. He reiterates their strong case and expresses confidence in their position.

The company is waiting for a ruling from the competition appeals tribunal, which is a complex regulatory process. They cannot speculate on the outcome, but anticipate receiving it by the end of the year. If the ruling does not go in their favor, they will continue to defend their position and provide reliable emergency communication services. The company is still fulfilling their contract while waiting for the ruling and has started deferring revenue on Airwave. This will result in a $200 million revenue decrease next year, with $110-$115 million coming from Airwave and the rest from ESN. The company will adjust their accounting if the ruling is different. Keith Housum asked a question, but the content of the question is not mentioned in the paragraph.

The supply chain issues with semiconductor chips are improving, but there is still room for further improvement. PPV benefit is expected to continue in 2024. M&A will continue to be a key part of the company's strategy, with potential for both small tuck-in acquisitions and larger, transformational ones. The company is in a strong financial position to pursue these opportunities.

The speaker discusses the company's record backlog and orders in the third quarter, and expresses confidence in their ability to continue converting orders and maintaining a strong backlog. They also mention the challenge of navigating supply chain issues related to semiconductors.

The speaker is positive about the company's end markets and the demand for their products in the public safety and enterprise security sectors. They expect to see growth in 2024 and will provide updates in February. The backlog converting to revenue may also have a positive impact on margins.

The company is pleased with their 8% revenue growth in Q3, considering the tough comparison to the previous year. They attribute the growth to their investments in LMR and Command Center, but fell short on their Video and SI products. They highlight new product releases, such as the H6A camera and ACC8, as contributing factors to their growth.

The speaker discusses the company's performance in various verticals, including government, education, healthcare, and industrial, which all showed resilience and growth. They also mention investments in these markets and the success of command center software, managed services, and a recent project in Denmark. The speaker then addresses the company's 4Q and fiscal guidance, stating that they anticipate 4% revenue growth despite $105 million in headwinds, including an Airwave deferral and a business model change.

During the earnings call, the company reported a 4% growth in revenue, which was higher than expected. This was due to strong performance from their Rave product, which has been integrated with other products and has seen increased adoption in the education market. The federal sector also saw growth, with a record year and a broad-based increase in contracts from various government agencies.

The company has received $600 million in orders for their APX NEXT refresh cycle since its launch in 2020. They saw $100 million in orders in the third quarter of 2023 and are seeing success with both major cities and smaller state and local customers. The company is pleased with the momentum and acceleration of the refresh cycle.

The company has seen success in their LMR business with their APX NEXT family of radios, which has been a game changer due to its world-class ergonomics and audio quality. They have also seen increased demand for location services that work with their command center software and Rave solution, as well as the ability to extend the network through SmartConnect. In terms of their Surveillance business, public safety is now one of their largest vertical markets, with growth in education, healthcare, energy production, utilities, and transportation. The enterprise space is primarily focused on safety and security, with a strong presence in education, healthcare, and industries such as energy production and transportation.

Joe Cardoso asks about the sustainability of mid-single-digit growth in the APX NEXT and LMR segments. Jason Winkler responds that the portfolio is still refreshing and they are investing in other parts of the portfolio. He expects continued growth due to their pricing strategy and R&D investments. Joe then asks about free cash flow and potential for increased shareholder return. Jason responds that they are seeing tailwinds and expect more consistent conversion going forward, potentially leading to increased shareholder return.

The CEO of Motorola Solutions discusses the company's strong performance and plans for the future. He highlights the $1.9 billion in cash flow and decrease in inventory levels. He also emphasizes the importance of the company's investments in safety and security, and their role in creating safer communities. The CEO expresses confidence in the team and their ability to balance results and long-term investments. He concludes by stating that in a world of increasing threats, the company's solutions are more important than ever.

The company's goal is to integrate public safety with private organizations and institutions to provide customized solutions that protect people, property, and places. The speaker is proud of the company's performance and believes there is a strong outlook for the business, with record orders, backlog, and a robust funnel. They look forward to providing further updates in February. The operator then concludes the call and provides information on how to access a replay of the call.

This summary was generated with AI and may contain some inaccuracies.