For 11%, while in Command Center, we continue to expect approximately 15% growth. Before I turn the call back to Greg, I wanted to provide an update around tariffs and memory costs. We now expect the tariff impact to be neutral for the full year as the IEPA refunds we recorded in Q2 offsets the $60 million in tariff headwinds that we had planned for this year. And regarding memory... We now anticipate our direct memory spend to be approximately $150 million this year, up from $50 million last year. Our teams continue to successfully navigate this challenging supply environment, carrying higher inventory and collaborating closely with our key suppliers to secure continuity of supply. We still expect gross margins to be comparable to last year, as the now improved tariff outlook I mentioned offsets the increased memory cost expectations since our last call. And for full-year operating margins, we now expect approximately 170 basis points of expansion, up from 100 basis points previously. Finally, our balance sheet remains strong and gives us plenty of headroom and flexibility on capital allocation. As we previously highlighted, we expect to raise approximately $1 billion of incremental debt in the form of senior notes and term loans to finance the DFEND acquisition. And we still expect to finish the year with a net debt to EBITDA leverage at approximately 2x, which is similar to where we ended last year. With that, I would now like to turn the call back to Greg.

Thanks, Jason. I'd like to conclude with a few final thoughts before we open it up for Q&A. First, Q2 was superb, and I'm extremely pleased with our executions. Revenue was up 13% with significant operating margin expansion, and we drove just under $500 million in operating cash flow. Additionally, we achieved record Q2 orders and backlog, putting us in a strong position heading into the second half of this year. Second, we're seeing strength across our safety and security ecosystem. Our video business continues to perform well, particularly in mobile video, where as Jason mentioned, we secured and many more. These deals were highly competitive and what's most encouraging is that both of these large agencies are first-time users for body-worn camera and in-car video solutions. Command Center continues its strong momentum as customers are increasingly adopting our software and AI-assist solutions to simplify their complex emergency response workflows. Third, Sylvus is performing exceptionally well, powering leading-edge Manet connectivity for unmanned systems and battlefield communications, and pending regulatory approvals, we're also looking forward to the acquisition of Defend, and industry leader in counter-drone solutions, which goes beyond simple detection and differentiating itself through non-kinetic cyber takeover mitigation capabilities that are increasingly critical for public safety. When you consider Sylvus' leading-edge Manet communications for defense and DEFENSE's leading-edge detection and mitigation for public safety, I think we're very well positioned. to address our customers' rapidly growing needs for unmanned systems in defense and counter drone solutions in public safety. And finally, in addition to our strong results and momentum, our balance sheet and continued robust cash flow enable us to be flexible in how we deploy capital and drive long-term value both organically and through targeted acquisitions. I feel very good about where we are and the increased guidance for the year reflects our confidence. I'll now turn the call back over to Brian.

Thank you, Greg. Before we begin taking questions, I would 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?

The floor is now open for questions. If you have a question or comment, please press star five on your telephone keypad. If for any reason you would like to remove yourself from the queue, please press star five once again. We do ask that while you pose your question, please pick up your handset to provide optimal sound quality. Thank you. Our first question will come from Tim Long with Barclays. Your line is open. Please go ahead.

Thank you. Got a question on syllabus, and then I'll follow up with one on video. For Sylvus, obviously another, you know, another raise here. That's great to see and demand seems really strong there. Greg or Jack, could you just touch upon some of the capacity increases you guys are undertaking? What does that mean for, you know, the flow of this business? Are we still limited by capacity? And what would that mean for Sylvus as we look out the next year or two? And then I'll follow up after that.

Sure, Tim, let me just dimensionalize Sylvus, too, in terms of its performance. It did about $210 million in Q1, about $230 million in Q2, and as you heard us on the call, we raised the year to about $850, and Jack can talk about some of the things we're doing around capacity expansion.

Yeah, Tim, so the first thing we did was within our Los Angeles site, we added capacity there, specifically a second floor. I think you read, Tim, that we announced the construction of a facility, a new facility manufacturing facility in Salt Lake City, which we're very excited about and consistent with what we said before. We'll start to see the benefit of that in 2027, but the increased guide for Sylvus this year takes into account our current capacity, and we'll live within that. I think one of the things we're also pleased with, Tim, is we've doubled the size of the sales force, so it just continues to put more balls in play for us.

Okay. That's great. Thanks. And then, Just wanted to touch on the video business. A little bit about that mix and what that means in the quarter, and does that lead us towards a little bit more growth in the software side in the future? Anything on that mix and the take from that? Appreciate it.

You broke up a little bit, but I think you're asking about the mix and performance of software versus products in SI there? Yeah, video. A video? Okay, yeah. So first of all, we're very pleased with where we're at, and we actually grew 12% during the quarter in total, and we bumped up our guide to 11% from 10 to 11. So overall, performing even better than we had expected. In terms of the mix, at the half, Both software and services and products are performing well. SNS software specifically for that part of the business is up double digits and we expect software to be up double digits in the second half as well. We've seen strong camera sales. That's what's in part driving two quarters in a row now of strong products. But the overall mix as we step back to the year, it reflects What we expect, the investments that Mahesh and team are making in our cloud and hybrid offer, and the increased sales coverage that Molloy has. So we're happy with where we're at. By the way, mobile video, as we mentioned on the call, mobile video, also expectations are very good.

Okay. Thank you, guys. Appreciate it. Thanks, Tim.

Your next question will come from Joseph Cardoso with J.P. Morgan. Your line is open. Please go ahead.

Hey, good afternoon, and thanks for the question here. Maybe for my first one, and perhaps maybe I'm jumping ahead here and looking at the fourth quarter, but when I do the back-of-the-envelope math on the implied fourth quarter revenue outlook, and embeds a pretty nice acceleration, both sequentially and year-over-year. So maybe you can just help me think through the drivers behind that uptick that you guys are embedding into the guide, maybe thinking about it from a demand perspective across the portfolio. Is there anything in particular that's driving kind of that acceleration here as we think about the exit trajectory for the year? And then also maybe just a quick clarification, are you guys including acquisitions that haven't been closed yet into that guidance? And then I do have a follow-up.

So, Joe, to answer the last part first, the guidance we're providing for the full year and the beat and the raise reflect the assets we have today. Love the fact that we're, as Jason mentioned, guiding the year up $175 million for the full year on top line revenue. All of that is pretty much MCN. of which $100 million is Sylvus, $75 million of LMR. The confidence is also informed by the overperformance in Q2, which we beat consensus by $130 million. Why did we do that? It's because of better conversion and strong demand. That said, the second half as we look remains unchanged. We've always planned for a strong second half. That's informed by the visibility of what we have. It's informed by double-digit orders growth again, expected in Q2, expected double-digit orders in the second half. And when you decompose kind of our expectations, there are some specific ship acceptance and product releases around the infrastructure D-series. that are coming in Q4 that marry up with the conversion expectations of Jack's sales team, which informs that strong Q4. And lastly, I'd say, you know, LMR is strong. LMR was stronger than we thought in Q2. But by the way, we still expect the LMR business to grow in the second half of this year 10% as well. So just really strong growth, great orders performance, and Feel good about where we are now with our expectations between now and the end of the year.

Awesome color, Greg. I really appreciate all of that. And then maybe as my second one here, you know, gross margin stepped up meaningfully in the quarter, even excluding the tariff benefit. But you guys are still guiding stable gross margin outlook for the full year. Maybe can you bridge the 2Q performance against that? Like, what are the puts and takes relative to the headwinds from the cost inflation that you're highlighting versus maybe the tailwinds from mix and pricing levers? And how does that shake out as we progress through the year to kind of get us to this more stable gross margin outlook for the full year? Thanks for the question.

Sure. So favorable mix has been a growth driver for us for a number of quarters, and we expect that to continue. Customers are adopting more feature-rich solutions, and that's in part What helps drive our growth. In terms of headwinds, I mentioned on the call that memory, which last year was 50 million, we now expect to be 150 million. That's up from 90 days ago. So that 100 million of increase, a large part of that's going to be faced in the second half because of timing, because of inventory and the positions we had to begin the year. So that's a little color around the headwinds. With the offsets we're applying, we're still able to maintain comparable gross margins. for the year, and to grow OE for the company at 170 bps with contributions at OE from both segments.

Your next question will come from Andrew Spinella with UBS. Your line is open. Please ask your question.

Thank you. I think there is obviously a lot of interest in the second half ramp in the LMR business. coming into this quarter. But the second question that I typically have been getting is trying to understand if you put all this COVID backlog shifting behind us and this sharp ramp in the second half, how are we looking in terms of increases in officers or international markets, anything that can drive that, or infrastructure, D-series, anything that can drive that business to an accelerated growth rate? over the medium term.

Thanks for the question. So certainly coming out of the last call, there's been a lot of interest in LMR. We're pleased with where public safety LMR is, which is MCN, the technology, minus syllabus. We had growth in the quarter. We had continued order strength, as Greg mentioned. We overperformed in the quarter, and we increased the year $75 million, whereas now we expect this year's LMR growth to be better than last year's. and we've always planned for a ramp in the second half and that's consistent with, in part, product releases. The D-Series deals that we've been talking about, we talked about three of them on the call and more prior to that, require staging and implementation and going and getting to sites. That's planned for the second half and in addition, Jack, you've got some product releases happening in D-Series that'll make it available to more customers in the second half.

UHF will begin shipping Q4, Jason.

So nothing's changed in our expectations for first half, second half contribution. If anything, we've overperformed our expectations in the first half.

And Andrew, I would say just kind of overall, when you think about the trend of public safety systems, or let's just call it LMR, and what those platforms afford our customers, Historically, it was always around mission-critical voice. Now, with the adoption of APEX Next, it incorporates broadband for 5G and broadband applications. Now, our latest APEX Next radio is LEO compatible, adding another band for rural coverage for low Earth orbit satellite. You have the device refreshes with APEX Next. Now, we introduce the D-series, which is the first time We've upgraded the infrastructure in a dozen years, and that's informing part of the strong growth in Q4, given ship release of new infrastructure. And then, look, you're going to see us continue to do things around this multidimensional, multimodal platform called Public Safety LMR. And I just think that more and more customers see the criticality of LMR. They're making investments in LMR and MCN. We two are as well, both organically and inorganically. And while we mentioned Defend and the announcement of that deal, that Defend was a highly sought after asset. It's all about leading counter drone technology, not just detect and track and identify, but surgically do cyber takeover, which very, very few people do. And we think Defend does the best. will work the traps on the regulatory approvals, and there's still work to be done there. But we're excited about that asset as well, which we had mentioned to you at the time we announced the deal. We expect it to be about $185 million in revenue. It has historically a CAGR revenue growth of 50% over the last three years. But again, as you think about LMRs, you think about critical networks, As you think about public safety platforms and the unique ecosystem and capability we're building, it's not just what we have today, but what we expect to have shortly, and that's exciting as well.

Appreciate that. One follow-up question, Greg. AI has been in the market now. You've had a product for maybe a couple quarters. Some of the competitors have had different types of products similar to yours, some more analytical. How is the industry accepting AI? Is it performing to expectations both your product and across the industry in terms of acceptance and just performance?

I think it's performing well. We talk about AI in the context of embedding it in pretty much everything we do, specifically in the context of public safety around the individual personas. So how does AI How does it get implemented and productized through the lens of a public safety responder law enforcement offer? How does it get instantiated with a dispatcher? How does it get implemented through a real-time crime center? And I think Mahesh has done a great job of building it out both on-prem as well as hybrid solutions and I think our traction is quite good.

The other thing I would say and maybe echoing one of the key points that Greg just made is AI is no longer a nice-to-have, it's a need-to-have within each of our applications. And we have taken that philosophy right from the beginning where it's not an over-the-top solution, it is embedded deeply within each of our platforms.

It's integrated.

And just to sort of punctuate that point, 100% of our Vesta emergency call handling solutions in Q2 were at the assist tier, which is effectively the tier of our solution that includes all the AI capabilities. The same is true across CAD records as well. So it is becoming something that is key and embedded within each of those platforms, and that in turn is meaningfully raising our ASPs across the board. A couple of other things that I think that we have done and we take great pride in is we introduced this notion of AI labels. and that is I think quite important for our customers because they would like to know what the status of data ownership is, what type of models are being used, does it run on-prem, does it run on cloud, what elements of data are used to compute various things that they are seeing from a decision standpoint. We are very transparent and open about what it is that they do and across the board we also offer free training on demand for our customers to effectively use those capabilities in whatever workflows that they choose to use it for. And we are seeing great acceptance across the board with that. Thank you.

Thanks, Andrew.

Your next question will come from Adam Tindall with Raymond James. Your line is open. Please go ahead.

Okay, thanks. Good afternoon. I just wanted to maybe start this time last quarter, I think a lot of us were surprised by the PSI operating margin in Q1. SNS had an upside to offset, but I think the composition of that quarter was a little different than investors thought. Here we are 90 days later with a huge rebound in PSI margins on a sequential basis. So maybe just as a starting point, Jason, could you walk through sort of the drivers that led to this level of improvement? and you've mentioned memory costs increasing. I know in the past, as you had cost increases, it makes sense for you to start raising price to correspond with that. I wonder how you're thinking about pricing as a lever as well going forward.

Sure, Adam. So part of Q2, as we mentioned, was stronger conversion with orders brought in by the sales team that we were able to execute in. A lot of that has to do with devices. and so we had more devices shipments. We have a higher inventory position by the way that's helping us get to strong quick turn levels. It's helping us navigate the memory challenges on pricing. So part of the improvement in op margin quarter over quarter had to do with the mix towards devices which we were able to turn within the quarter. That's a key driver as to the over performance and the better margins. The second part of your question around you know, levers that we have. I mean, memory as a content to LMRs are pretty small. It's a more material contributor item in video. We have made some surgical price increases on high memory content items in video, for example, like video servers. And we'll continue to look at that as an overall offset for the portfolio. But continuing to secure the supply that we need, of course, paying higher prices, but it's enabling us to meet the demand that we're seeing. We'll continue to look at it as a possibility going forward.

Got it. Maybe just continuing that thought as a follow-up, Greg. Investors are looking at the product backlog being down sequentially but also your positive commentary on the outlook for the product business in particular I think Jason's guidance suggests that the back half is actually going to accelerate in terms of the product growth. So with product backlog down sequentially versus this acceleration implied in revenue, what are investors maybe missing if they over fixate on the backlog trend thing?

Look, we're thrilled. I know you're focused on the sequential But we love the year-over-year performance, and at the end of the day, this is more about, as Jason and we have said since the beginning of the year, the MSI revenue story becomes more one of conversion than backlog. Now, having said that, love the fact that Q2 was another double-digit orders quarter. Love the fact that the back half on orders growth is expected to be double-digits. But if you want to specifically look at product backlog, look as we sit here in August. At the end of the day, I expect product backlog to be up at the end of this year versus last year. So, but I think it's more, backlog is a component, but the story more about our growth is overall demand, which is stronger, conversion, which is stronger, and double-digit orders growth.

And Adam, to your point, the Product backlog of the high threes is a strong place to be, complemented by the double-digit order settling that's in front of us and that we've been capturing and that the pipeline supports going forward. And that's the setup for how we expect things to play out in the second half of the year.

That's helpful. Congrats on an awesome quarter. Yeah, thank you, Adam. Appreciate it.

Your next question will come from George Nodder with Wolf Research. Your line is open. Please go ahead.

Hi, guys. Thanks very much. I wanted to dig into the syllabus progress a bit more. Obviously, it continues to really do well. I know, I think you said, Jack, that you increased the sales force or doubled the size of the sales force. But I'm just curious, like, as you look out, where are you seeing opportunities, what geos, what applications? Anything more you can tell us about the underlying demand trends there and customer interest would be great. Thanks.

We could tag team it, but contextually, George, I think the good news is the overall demand is driven by international demand and what I would characterize as kind of a macro global defense modernization. I think you see our growth driven by NATO countries, EU defense spending, Germany is a theater in particular that's strong. Obviously, Ukraine that's in conflict and growing demand in the U.S. and Indo-Pacific. You take that strong demand and couple it with the earlier question around capacity expansion. Jack's done a great job more than doubling the sales force. I think you'll see supply chain efficiencies increase as well. We have the new capacity Thank you very much. and the Sylvus team in L.A., it's been superb and thrilled to have it. And look, it's proving out, I think, the thesis behind we were very disciplined and intentional with that Sylvus acquisition. I would say the same thing about the Fenton. We think in Sylvus, it's the leading player and the leading edge technology in unmanned. And similarly, once we run the traps on the regulatory approvals. We think Defend is unique specifically around cyber takeover and mitigation, which is a unique characteristic, and we love both of those assets.

Yeah, the only thing I'd build on is, listen, the secret sauce here is a spectrum-dominant 2.0 software. Exactly. Not only we talked about man-made technology being high bandwidth, which enables various forms of multimodal throughput, on the battlefield, but it's anti-jam. It's a low probability intercept and detect. But just specifically, the USDOW just ran some trials and Sylvus received exceptional scoring in terms of anti-jam testing results. And I think as we see in highly contested environments, when us versus our competition get put to the test, I think it's just further testament to what Vivek and the technical team have built there. And then we've added, as we talked about, being a scale player. We're invested in additional capacity, go to market. We continue to extend and invest in R&D, not only in the waveform, but in the software aspects of it. And they're firing on all cylinders, I think, just to echo what Greg said. We're really proud of what they've accomplished.

Super. Thank you very much.

Thanks, George.

Your next question will come from Meta Marshall with Morgan Stanley. Your line is open. Please go ahead.

Great, thanks. I wanted to ask a question on APX Next and just the software subscriptions that you're seeing kind of attached to that. In the past, you've noted somewhere around $300 per year. Just wanted to see what applications are either getting the most traction or if there's any update to that number. And then maybe as a follow-up question, just kind of any Traction with SDR. Thanks.

Sure. Thanks, Meta. And you're right. We expect 300,000 subscribers by the year end 26. That would be up from about 200,000 by end of 25. So strong growth. The pricing of the apps is around 300. It's gone up a little bit with the advent of some new apps and I'll let Jack talk about where the apps that the customers like best, but they are definitely, it's a driver. It's now going to be almost $100 million ARR business by year's end.

Yeah, I think just, Matt, in terms of those things, it's Smart Connect, which essentially enables a user who may be going out of their jurisdiction to expand their coverage capacity, Smart Programming, and then location continues to be, as we think about accountability, location continues to be an application that gets consumed. Related to SVX, and Mahesh may have something you want to add, SVX Traction, we're really proud. We've now got 150 customers operational with SVX. You heard Greg and Jason talk about Florida Highway Patrol in Kansas City, Missouri. I want to point out that those, we didn't go in and extend those customers. They're not existing customers we extended. Those were new RFPs that we secured against our competition. In addition to St. Joseph County, Indiana, who used to deal with one of our competitors and now signed on because they love the story of our full ecosystem. That's just a North American Q2. You look at what we've done internationally. We're over 20 countries right now in body-worn camera. Name a couple big ones. Over 20,000 users with the Sao Paulo Military Police. Moroccan Gendarmerie, a Nordic National Police Department. And I think we continue to get momentum with our reach and trust that we have internationally. And those successes were competitive flips.

They absolutely were. Right. The other point I'd make around Apex Next and SVX is they are paired together. So when we talk about an SVX win, that's paired with customers that are using APX Next. So it's yet another combination that's powerful for both parts of the portfolio.

Great. Thanks so much.

Thanks, Mehta.

Your next question will come from Tomer Zilberman from Bank of America. Your line is open. Please go ahead.

Hey, guys. I wanted to go back to the LMR discussion. I think you mentioned earlier that you expect the segment to grow 10% in the second half. I mean, that's a really strong number. That's, you know, on par with the growth that you were seeing a couple of years ago when you had the benefit of both the North American refresh cycle and also the supply chain environment, which is driving up orders. So I guess the question is, as it pertains to your commentary around Apex Next, is that driving another cycle this time around? And I think a while ago you gave us a disclosure that Apex Next was about 25% of public safety shipments. Is there any update to that number you can give us?

Sure. So we talked about a growth driver of the second half ramp being infrastructure, which is D-Series, and the timing of the deployments and the new offer of UHF, which is coming to market. Conversion and quick turn for devices continues to be strong. It was stronger than we expected in Q2, and we expect it to be strong in the second half with continued momentum and customers choosing Apex Next. which comes to us at a premium at the time of sale and also with the ARR subscription that Mehta just asked about.

Yeah, I mean, the only other thing that we haven't talked about is Apex Next has historically been a police phenomenon and a credit to Mahesh and his team. But, you know, in Q2, we announced the Apex, the first Apex Next XN, which actually puts us in the first NF national fire protection category. 1930 certification. So we have an Apex Next device that we can now bring to the fire market as well.

Thanks. Thank you.

Your next question will come from James Fisher with Piper Sandler. Your line is open. Please go ahead.

Thanks for taking my question. This is Ryan. I'm for James Fish. On the drone side, any pickup in the pipeline post-World Cup? And now that you have Defend and Sylvus as pillars here, how are you feeling about mitigation and prevention strategies that we could see MSI add organically or inorganically going forward?

Well, Ryan, we don't have Defend yet. We are expecting that transaction to close in the second half. But, you know, think about it. Sylvus is... Unmanned Defense. DEFEND is counter drone technology for public safety. So different technologies and different verticals of emphasis. I love DEFEND. I love it was an engagement that took multiple months, as I mentioned a few minutes ago. It's a leading edge, highly sought after asset. Because look, we hear all these things about drones. It's one thing to detect them. A lot of people can do that. DEFEND can detect, it can track, it can identify, but then how do you mitigate it? And how do you mitigate it in a public safety context or critical infrastructure context without collateral damage? You can't use bombs or bullets or kinetic. You have to find a different way. What we loved about DEFEND and their creativity and ingenuity is they do it through surgical cyber takeover. So they track it, identify it, take it over and take the communications link over and then neutralize that threat with no residual damage, no threat to public safety communities. That's what we think is best in class. So I think there's a lot of that. By the way, if you look at FIFA, you mentioned Ryan World Cup. It was defend was in virtually all of those theaters, all of those stadiums. providing cyber mitigation, which played a critical role. And I read a report several days ago that there was only over 700 different drones detected over multiple sites over the course of FIFA. I think defend was a meaningful component to that detection and mitigation. So feel very good about it.

Yeah. And if you look at just in the last seven days, you know, the Department of Homeland Security came out and announced a one and a half billion dollar Unmanned Aircraft Contract, two tiers, first of which was systems, the second of which was comprehensive services. It's important to point out that there was multi-vendors selected on the systems, but only one, Defend, that actually provides cyber mitigation system. As to Greg, I think, eloquently pointed out, to keep the public safe, to bring the drone down safely, there's only one way to do it, and that's cyber, and they were the company selected there.

Thank you. And then a quick follow-up. How are state and local municipal budgets holding up for 2026? And are you seeing any hesitation in large-scale APX Next upgrades? Or is the funding environment still highly supportive?

No. So, you know, 2026, the budgets have been, you know, continue to be very good. We've actually, what we do this time of year, mid-year, because we start to look at 27 budgets, which have now been floated, in some cases approved, The good news for us is in 2027, for state and local, public safety budgets are growing faster than government budgets, both state and local. And then if we think about software as it relates to public safety and the funding attributed to software for public safety, that's growing even faster than money is being allocated to public safety. So we think all in for 2027, generally conducive to our business. Thank you, Roger.

Thanks, Ryan.

Your next question will come from Matt Nicknam with Truist. Your line is open. Please go ahead.

Hey, thanks so much for taking the question. Congrats on the quarter. I have one follow-up and one, I guess, more main question. So the follow-up is we talked about double-digit order growth in the second half of the year. I just want to clarify, is that for the Protestant SI segment or is that for the total business? and then broadly speaking around supply chain. Just wondering if you can talk about the visibility you've got with your suppliers in terms of being able to procure what you need to accommodate demand and whether there could be upside to the guide if you're able to get access to more this year. Thanks.

Matt, I'll answer the second question first. I think you're getting at memory. Memory for us is a challenge in what we're having to pay for. We're paying more. This year we're going to spend $150 million. Last year was $50 million. The availability has been good and continues to be good. Because we're working with our vendors to secure the continuity of supply, we are carrying higher inventory and capturing its availability. And I'd remind those on the call that our LMR, specifically MCN portfolio, does use a simpler form of RAM. It's not the latest, greatest, high-speed DRAM. And we can substitute it. and so that's allowing us to have more shots on goal and we are attaining and getting the continuity supply we need. We are having to pay more. That said, we're still growing operating margins, 170 bps expected this year with comparable gross margins. To answer the first part of your question, the double digits growth is expected in products, specifically products and SI in the second half.

Thank you.

Once again, if you have a question, you may press star five on your telephone keypad to enter the queue. Your next question will come from Irvin Liu with Evercore ISI. Your line is open. Please go ahead.

Hi, thank you, and congrats on the nice set of numbers. I had one in a follow-up as well. Just given the continued outperformance of Sylvus, I wanted to check whether you held an updated view on where the Sylvus TAM stands today. I think most recently you indicated that TAM is currently about $3 billion and expected to double over the next four to five years. But I guess I just wanted to better understand whether your growth here on Sylvus was more TAM-driven or share-driven. I mean, it sounds like the latter to me.

I would say it's more share-driven actually than TAM-driven. We don't have any information that would materially change the TAM that you just outlined that we have quantified. I think the performance of Sylvus is around share gain and execution and not addressable market expansion per se.

Got it. And thank you. And for my follow-up, you discussed the D-Series infrastructure product as a contributor of LMR strengthening for Q4. Looking ahead, just given that this is the first infrastructure product in 12 years, Are you seeing any sort of benefits of a pent-up demand for infrastructure broadly that can potentially unlock multi-year infrastructure refresh cycle?

Yes, we are. And just to dimensionalize it, infrastructure is a little less than a quarter of the LMR business. And to have a D-series, as Greg mentioned, that's new, refreshed, Jack can talk about the customer attributes they like the best. and to have them investing in it means that it's expected to be a growth driver, not only for products in SI, by the way. Most of the customers that are investing in this infrastructure are signing up for new five, 10-year software and services wrappers around it. So we'll see the benefit of that over time as well. Jack, in terms of features and what's really up to you?

I think we've made coverage more efficient. It's more energy efficient at the site, which is critically important to a lot of customers right now as they think about kind of greening their networks. We also introduced our AstroSight satellite resiliency, which essentially improves the resiliency and redundancy of the networks. That incorporates low Earth orbit satellite just as a backup to a backup, if you will. But I think the most important thing for us as we look at it Our customers are betting on us for the long term. It's Minnesota Department of Transportation for five years, Maryland a 10-year renewal. It's Australia. We have a customer down in Australia signing on for 10 years. So I think it's a continued validation. We've had three big states that have signed on with these series in the last three, four quarters, and three major American cities that have signed on. We think there's more to come. Our customers are excited about it. And by the way, there's two rails. They're investing in the network, but they're also, as Jason pointed out earlier, continuing to think about the refreshing of the devices. And I think it's a testament to our product team on how they envision these things working together. And then obviously the services that we provision for our customers wrap around those things.

Your final question will come from Luke DePalma with William Blair. Your line is open. Please go ahead.

Greg, Jason, Jack, and Mahesh, good afternoon.

How are you?

Great. Following up on the last question, should the D-Series upgrade cycle be considered a one-time boost to the second half growth rate for this year, or should it carry over into next year such that LMR will remain in positive growth territory?

Think of D-Series and infrastructure as a slower-moving building part of our growth story. I talked about three states. We have over 40 statewide networks in the United States, and we have 10 of the provincial networks in Canada and so you can just do the math on that Lou. We got a lot more to do and these are multi-year plan and the reality of it is is a lot of these people sit down particularly with infrastructure and look at a 10-year plan and so they're all not going to happen at once. It won't be just a fourth quarter thing. This will be something that will continue to refresh networks quite frankly into the 2030s. Great.

So it should be a positive catalyst also for next year, right? Yes. Great. And my second question, the Silvis acquisition has been a home run, and many investors have wondered why Silvis didn't go the IPO path rather than selling to you because the growth has been so exceptionally strong. I wanted to ask about this Motorola effect and your ability to supercharge growth. So DFEN has elite technology for radio frequency counter drone mitigation. And do you expect the combination of DFEN's technology with Motorola's brand and the cross-selling and the manufacturing capacity that you can replicate with DeFend, what you've done with Sylvus.

Yeah, and you hit on it. It's exactly right. So I think Sylvus, we think Sylvus is a one of one asset. I mentioned that and that acquisition took a long time. We were really thorough. We had, I mean, it was almost a year in its engagement. We were very intentional. We were very thorough. What is it about Motorola solutions that can make Sylvus grow better Number one is the brand equity and the installed base of the customers that we have in this case, particularly MODs internationally, where we immediately give that asset, which is you called elite, I agree, visibility into theaters maybe they didn't have initially. Second, it's go-to-market sales motion. Molloy's already more than doubled the sales force. Third is coals on the fire and expansion and focus around government affairs, both in North America and internationally. Fourth is being able to buy supply chain components, efficiency, capacity in a way that Motorola can bring to bear. The back office, the IT, the systems, the manufacturing, low unit cost component acquisition. So net net We can have its growth, it can grow faster through sales and it can scale faster with the infrastructure of Motorola solutions. And lastly, highly culturally compatible, RF centricity, different market, great product. The Sylvus team has been superb, not just because of the revenue and the growth and we love all that, it's great. The people are outstanding. The technical depth, superb. They see around corners. They look and we look to extend the lead we believe we have even further from a technology expansion point. And I think we feel very similarly about Defend. The elite technology around cyber takeover, around not just detection and tracking and identification, but unique mitigation. Once again, by the way, an Israeli company, We've been in Israel over 60 years. We have 600 people there, plus or minus. So the density of our presence in Israel, the commonality around cultural innovation, not just in Israel, but in RF, and that cultural creativity that Mahesh's LMR team and mission-critical team brings, I think will be a similar story with Defend. I think we can do more with Defend than anyone else can, or they could do on their own. and I think that was largely in part why the two companies decided to get together. I'm super excited about the opportunities in public safety counter drone for that asset once we're able to close it after regulatory approval.

Thanks, Greg. Thank you.

This concludes our question and answer session. I will now turn the floor over to Mr. Greg Brown, Chairman and Chief Executive Officer for any additional comments or closing remarks.

I just want to say thank you to all the Motorola people listening in, to our customers, thank you to our partners. It was a great quarter. Great quarter with double-digit orders, strong revenue growth, operating margin expansion, generating just under $500 million just in Q2 of cash flow. We talked about the strength of Mission Critical Networks and Land Mobile Radio specifically. That informed our beat in Q2, which was 130 million, which was 100 million from LMR and 30 million driven by Sylvus. That's informing the full year raise of 175 million, 100 million from Sylvus, generally 75 million from LMR. The business is strong. The product refresh cycle is good, both on devices and on infrastructure. I think the supply chain team, I want to say thank you as well to Motorola. We made a conscious decision to carry more inventory. We were thoughtful about getting ahead of memory and aligning that with conversion that allowed us to execute. We think that will continue in the back half. And lastly, I just love... The momentum we have as we sit here today for the rest of this year. Thanks for listening. Look forward to talking to you next November.

This does conclude today's teleconference. A replay of this call will be available over the internet within three hours. The website address is www.motorolasolutions.com forward slash investor. We thank you for your participation and ask that you please disconnect your lines at this time.