Motorola Solutions, Inc.

Earlier today, we announced the acquisition of Videotech, a global supplier of compliant fixed video cameras. Moving next to our segment results, Q1 products and system integration sales were $1.1 billion, up 9%, driven by anticipated strong growth in video and better supply availability in LMR. Revenue from acquisitions in the quarter was $7 million, and currency headwinds were $8 million. Operating earnings were 96 million or 8.7% of sales, down from 12.9% in the prior year, driven by the $50 million of higher semiconductor costs and higher freight costs previously mentioned, partially offset by higher sales. Some notable Q1 wins and achievements in this segment include an over $60 million nationwide P25 order for Taiwan National Police, 20 million of p25 upgrade orders for los angeles unified school district a 14 million dollar tetra upgrade for the israeli railways 11 million p25 expansion for a large u.s customer and a five million dollar video order for a large u.s public school system moving next to our software and services segment q1 revenue was 789 million up four percent from last year revenue from acquisitions was 10 million and currency headwinds were also 10 million. Growth in this segment was driven by video security and command center software, while LMR services was approximately flat, as expected, due to the impact of a tough comp related to customers' P25 system upgrades that were concentrated in the first quarter of 2021 due to the COVID delays throughout 2020 and the impact of unfavorable FX. Operating earnings were $278 million, or 35% of sales, down 170 basis points from last year, driven by a change in year-over-year mix and higher M&A operating expenses, partially offset by higher sales. For the full year, we still expect software and services revenue growth of 10%. And we expect operating margins that are comparable to last year, with the dilutive impact of recent M&A offset by pricing and improved operating leverage. Some notable Q1 highlights in the segment include $27 million command center software order for a customer in Latin America, a $20 million US federal multi-year service contract orders, $8 million command center software record management order for the city of Phoenix, and an $8 million services agreement with the city of Chicago. During the quarter, we grew our video security and access control software revenue by 28%. And subsequent to the quarter end, we launched the Public Safety Threat Alliance, a cybersecurity information sharing and intelligence hub for the public safety community. Looking next at our regional results, North America Q1 revenue was 1.3 billion, up 10% on growth across all three technologies. International Q1 revenue was 587 million, flat versus last year with growth in video security and command center software offset by a decline in LMR due to FX. We saw growth in Latin America and Asia PAC while Europe was slightly down, primarily due to FX. Moving to backlog, ending backlog with a Q1 record of 13.4 billion, up 19% or 2.1 billion compared to last year, driven by the airwave extension recorded in the fourth quarter of 21, and increased demand across all three technologies sequentially backlog was down 115 million driven primarily by the airwave and esn revenue burn during the quarter partially offset by growth in lmr and video products software and secure software and services backlog was up 1.3 billion compared to last year driven by the airwave extension and a 320 million increase multi-year services and software backlog in North America. Sequentially backlog was down $221 million or 2%, driven primarily by revenue recognition for Airwave and ESN during the quarter and typical order seasonality in North America. Products and SI backlog was $852 million compared to last year and up $106 million sequentially, driven primarily by strong LMR and video demand in both regions. We entered the year with a record backlog position and approximately 2.2 billion of our beginning backlog in the product segment was scheduled to be delivered in 2022 with over two thirds of this amount expected to be delivered in the first half. We saw continued strong demand for new orders during the quarter with a record Q1 orders total that included comprehensive pricing actions we implemented across our portfolio in January. We expect these new orders at higher prices together with higher volumes in the second half to lead to a significant profitability ramp throughout the year. Turning to our outlook, we expect Q2 sales to be up between 4% and 5% with non-GAAP EPS between $1.83 and $1.88 per share. This assumes approximately 50 million of FX headwinds, a diluted share count of approximately 173 million shares, and an effective tax rate of 22 to 23%. It also includes 50 million of year-over-year increased costs that we described on our last earnings call related to elevated material costs for semiconductor supply from secondary markets. For the full year, we are maintaining our prior revenue guidance of 7% growth and non-GAAP EPS guidance between $9.80 and $9.95 per share. despite the significant strengthening of the U.S. dollar since our last call. We now expect FX to be a headwind of $170 million for the year, up $110 million from our prior guidance. This outlook now assumes a diluted share count of approximately 173 million shares based on the timing of our share repurchases in the year and an effective tax rate of 21 to 21.5%. Additionally, our full-year operating cash flow guidance for approximately $1.9 billion and full-year OPEX expectations of approximately a $100 million increase over last year are also unchanged, inclusive of the new acquisitions we announced offset by targeted reductions we're making. Before I turn the call back to Greg, I wanted to reiterate some of the proactive measures we've been taking to navigate this dynamic environment. Amid strong demand, we've taken further pricing actions across various parts of our portfolio, which we expect to benefit our second half of the year. We remain cost disciplined with targeted OPEX costs planned while funding our recent acquisitions. We are strategically investing in inventory to maximize the parts availability to fulfill the strong demand that we're seeing. And finally, we continue to be good stewards of capital maintaining a strong balance sheet to be opportunistic and deploying capital on acquisitions and shareholder returns. I would now like to turn the call back to Greg.

Thanks, Jason. I thought I would end with a few thoughts on the business. First, business remains really strong despite the ongoing macroeconomic and semiconductor challenges. We had record Q1 orders and sales that drove results above our expectations We ended the quarter with our highest Q1 ending backlog ever, and our higher growth businesses and video security and command center software continue to grow at a multiple of their overall markets. Second, our healthy balance sheet and durable cash flow provides us with the flexibility to be opportunistic in our deployment of capital. During the quarter, we closed two additional acquisitions I'm excited about. Tetra Ireland, the provider of Ireland's nationwide digital radio service, for first responders is a business we've had our eye on for a while, actually, and it adds to our strong LMR managed services business. And AVA Security, a scalable, secure, and flexible cloud solution provides customers with the benefits of an enterprise-grade video security solution while minimizing the physical footprint of their security infrastructure. AVA complements our on-prem offerings in fixed video security and provides us with the flexibility to meet our customers where they are with options for both cloud or on-prem solutions. And finally, while the macroeconomic environment remains turbulent, I like our position. We're a leader in the markets we serve. We provide need to have solutions that are critical for customers. We continue to invest heavily in R&D and all of this provides us with the ability to take continued pricing actions to manage higher cost pressures. Additionally, we have strong predictable cash flows that allows us to continue to invest in our growth businesses while simultaneously returning capital to shareholders in the form of share repurchases and dividends. I'll now turn the call back over to Tim.

Thank you, Greg. Before we begin taking questions, I'd like to remind callers to limit themselves to one question and one follow-up to accommodate as many participants as possible. Operator, would you please remind our callers on the line how to ask a question?