Motorola Solutions Inc at Morgan Stanley Technology, Media & Telecom Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Meta Marshall - Morgan Stanley - Analyst : Great. So let's just jump in. Over the past couple of years, you've taken a very successful kind of core LMR business and expanded it with the video and command center business. Just how do you look your opportunity today, both the core opportunity and the opportunity to sell more products to existing customers with those new platforms or finding new customers altogether to sell products to?

Question: Meta Marshall - Morgan Stanley - Analyst : Okay. Perfect. Many of these are extensions you've gotten into have been -- we've gotten into through inorganic ways the attractiveness of your balance sheet has given you that capability. Just how do you look at M&A as a continued growth driver for the company?

Question: Meta Marshall - Morgan Stanley - Analyst : Okay. Perfect. How is -- you're moving a little bit less or further away from hardware being the only way of the sale to software kind of being more of a portion of the sale. Just how is that impacting kind of the business model? And how should investors think about that?

Question: Meta Marshall - Morgan Stanley - Analyst : Okay, got it. And so, this will kind of feed into the next question, because you exited 2024 with record backlog, but there's kind of been some concern around the mix of that backlog. With product backlog relatively steady, just, you've just noted that kind of more of the business is moving towards software and subscription, but just how should investors think about that transition impacting kind of the model just in terms of backlog and just, is there any headwind to growth as you kind of make that transition?

Question: Meta Marshall - Morgan Stanley - Analyst : Okay. Perfect. Shifting to customer budgets, you've noted that your business with the US government kind of accounts for around 9% of revenue. Just how should investors think about this exposure just in context of initiatives of the new administration to budget reductions or maybe kind of increases in immigration enforcement and just kind of how is it impacting how you think about growth for the next.

Question: Meta Marshall - Morgan Stanley - Analyst : Okay. And then I mean I would think that kind of with border control in all of those, those could potentially kind of be tailwinds to how you guys are thinking about there?

Question: Meta Marshall - Morgan Stanley - Analyst : Okay. Perfect, maybe state and local budgets kind of announced strength during COVID, given kind of a variety of factors, property taxes going up, various stimulus packages. And some of these tailwinds start to wane. Just how would you frame kind of the budget backdrop amongst these customers in '25? And just are there any risks of spillovers from kind of some of the federal efficiency initiatives to the state and local level?

Question: Meta Marshall - Morgan Stanley - Analyst : Okay. Perfect. You spoke about this a little bit upfront, but just when it comes to Command Center and video versus LMR, just how does the go-to-market change? And then kind of what investments are you thinking of to kind of optimize the growth in these various businesses? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 04, 2025 / 12:50AM, MSI.N - Motorola Solutions Inc at Morgan Stanley Technology, Media & Telecom Conference

Question: Meta Marshall - Morgan Stanley - Analyst : Got it. I mean Obviously, video and command center have been strong growth drivers, but LMR has been -- growth has been very healthy over the last couple of years in part as you've done the APX NEXT upgrade. A big question that we get sometimes is okay. Well, how durable is some of this growth that you're seeing from APX NEXT? You noted that it was less than 25% of device shipments in '24. But just how should investors think about kind of APX NEXT as a driver for LMR growth? Or did they get kind of too caught up in LMR cyclicality?

Question: Meta Marshall - Morgan Stanley - Analyst : Okay. So maybe less cyclicality and more kind of long-term driver, particularly as these devices become more free to run? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 04, 2025 / 12:50AM, MSI.N - Motorola Solutions Inc at Morgan Stanley Technology, Media & Telecom Conference

Question: Meta Marshall - Morgan Stanley - Analyst : Okay. Perfect. Turning to AI. Can you just speak to kind of how Motorola is implementing or monetizing across the hardware and software portfolio? And just -- maybe just starting with that.

Question: Meta Marshall - Morgan Stanley - Analyst : Okay. I mean as you look towards kind of future extensions at some point, clearly, that reduction in response times great. I mean those are real-life examples of tangible impacts. But just how do you think about the inorganic investments or partnerships to kind of expand out that skill set?

Question: Meta Marshall - Morgan Stanley - Analyst : Okay. Just can you give us a sense of kind of competitive dynamics there are, at least particularly on the video side, kind of one of those opportunities has always been kind of this installed base of Chinese cameras that are kind of out in the marketplace or just kind of opportunities to kind of take share in the market where there might have been kind of China-based vendors before? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 04, 2025 / 12:50AM, MSI.N - Motorola Solutions Inc at Morgan Stanley Technology, Media & Telecom Conference

Question: Meta Marshall - Morgan Stanley - Analyst : Okay. So is that a tailwind at this point or most of that kind of share.

Question: Meta Marshall - Morgan Stanley - Analyst : Okay. We just spoke about international of saying that Asia might not kind of be kind of the best target market opportunity. But just how are you looking at other areas where you can expand kind of both product and geography-wise -- or geography line.

Question: Meta Marshall - Morgan Stanley - Analyst : Okay. So then turning to the model, the most compelling part of Motorola may just be kind of how efficiently you guys have run the business from a profitability perspective. As you invest for growth, how do you think of kind of balancing and delivering incremental profitability versus kind of appropriating R&D and sales and marketing resources. Just how are you kind of thinking about what's the right balance there? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 04, 2025 / 12:50AM, MSI.N - Motorola Solutions Inc at Morgan Stanley Technology, Media & Telecom Conference

Question: Meta Marshall - Morgan Stanley - Analyst : Yeah. I mean how have you've been kind of you've always excelled at acquisitions. And do you keep those sales teams? Do you try to make sure that you're making sure that people can sell multiple products? Like what has been the most effective kind of go-to-market of those acquisitions?

Question: Meta Marshall - Morgan Stanley - Analyst : Okay. Perfect. So just more tactically around margins. How should we be thinking about the opportunity to expand margins further in particularly just given the impressive momentum you saw reaching 29% operating margins in '24?

Question: Meta Marshall - Morgan Stanley - Analyst : Okay. And then just, I know from a FX perspective, you noted that as a potential headwind kind of coming into the year. Just are there any offsets on kind of the P&L that we should be thinking of?

Question: Meta Marshall - Morgan Stanley - Analyst : Okay. And then just anything on tariffs or kind of how that should impact or how you're planning for that to avoid that impact in your business?

Question: Meta Marshall - Morgan Stanley - Analyst : Okay. Great. Any questions from the audience? All right. Perfect. Well, then we'll wrap it there -- sorry, you're by the podium. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 04, 2025 / 12:50AM, MSI.N - Motorola Solutions Inc at Morgan Stanley Technology, Media & Telecom Conference Unidentified Participant Yeah. Just understanding that you're very well aligned with where the government wants to spend, but there are some instances where the government has a pass-through to the state. So the states get their funding from the federal government, and that's what sounds like it's been a bit disrupted. Do you have a sense as to how much your states receive their funding from the federal government for the projects that you have at the state level?

Question: Meta Marshall - Morgan Stanley - Analyst : All right. Perfect. Did you want to say one more thing, Jason?

Question: Meta Marshall - Morgan Stanley - Analyst : All right. Perfect. Well, again, Jason, thank you so much for being here today.