Zebra Technologies Corporation (ZBRA) Earnings Call Transcript & Summary

Well, we'll go ahead and call this one to order. Thanks, all, for your interest today in Zebra. I'm Tommy Moll, Analyst here at Stephens, covering the company. Appreciate everyone taking the time to come visit with us today and listen to what some of these folks to my right have to say. I want to introduce some familiar faces. But for those who haven't had the chance to meet these gentlemen before, we have CEO, Anders Gustafsson, to my immediate right; CFO, Nathan Winters, at the end of the table. Anders, Nathan, thanks for coming. We appreciate it.

Thank you. It's great to be here. Our first in-person conference for a long time.

So format-wise, some of you may have attended a fireside before, but just frame for everyone. We run about 45 minutes. I have enough prepared questions to run us through the full 45 except I'm sure that many of you have questions that you'll want to interject. So I'll be happy to hand the mic, so to speak, around about 20, 30 minutes past. I'll make sure I get the most important ones out and then you can just start raising hands, we proceed from there.

But just to kind of kick off, Anders, I want to start on the strategic vision that you set out for the company. Enterprise Asset Intelligence is a phrase I think you or one of your predecessor at Zebra coined. So tell us what is that for the folks who haven't heard it directly from you before? And what inning are we in for your executing on that vision?

Yes. So Enterprise Asset Intelligence is how we've kind of branded our vision. We came up with that in 2014 when we did the enterprise acquisition or the Enterprise business, but to explain what the new business was and also what the vision for the new business was. At a high level, we talked about that as being when every asset, when every frontline worker is connected, visible and optimally utilized. So this is -- you can think of us now as a vertical workflow company. So we have solutions that basically solve vertical workflows where we tended to historically be more of a device company. And when we look at how do we execute on that vision, what is that we do for our customers, to make them become real. And we have this framework of sense, analyze, act. So we sense what's happening in the physical world, and that's kind of our heritage, you can read barcodes, RFID tags, we have expanded with machine vision. And then we can analyze all that data and enable our customers to act on that. So we -- that enables us to be much more outcome oriented and solve broader problems versus being a component in somebody else solution.

So let's move to some near-term impacts on your business, particularly around the pandemic.

I didn't answer your inning.

Yes, inning.

We often get the question around what inning are we in? It's a harder question to answer than you might think. You use a baseball analogy of inning. I said it's more like -- I'm not sure if we have any cricket fans, but in cricket test matches can go on for days and there's no end. So you never quite know how many innings there are, but I make the analogy of when we -- if you go back to 2015 and what we did in mobile computing in retail at that point, we're starting to migrate towards Android. We -- what we believe that the endgame at that point would have been we probably achieved by 2017. So at that point, we had -- average will be 7 or 8 devices in a store running -- in a retail store -- running maybe 3, 4 applications. Today, it will be routinely 70, 80 devices running 75, 80 applications. We did not have any expectation of how far this could go, and I think that this is kind of the same today. I'm not quite sure that what the end is. So we certainly believe that there's plenty of runway to expand the overall market and how we address this. And we've expanded with a lot of new capabilities and use cases over time that further kind of expands the opportunity with the TAM for us.

So let's talk about the runway -- particularly around your retail, grocery and e-commerce end markets. A lot of the larger customers in that ecosystem have accelerated their spend with you over the last 1.5 years or so, and it's been a big part of the growth behind your overall company. How long can those good times last for some of these large players? At what point is it more of a maturing customer set there and then time to really focus on growth elsewhere?

Yes. Another way to talk about what Enterprise Asset Intelligence all about as well how we're helping our customers digitize and automate their workflows. Again, that's something we've talked about, something we worked on since -- certainly for the last 8 years or so. But the market, I would say, has kind of moved to be much more aligned with our vision here. So today, I would say across every vertical we serve, every geography we work in, how to digitize and automate businesses, how to digitize workflows are top priorities for our customers. And COVID became a catalyst for accelerating a lot of these use cases. I tend to talk about buy online, pick up at store, a good illustration of this. There was a capability many retailers had very narrowly prior to COVID. They might have had a few stores where they used it and a couple of people who would execute on that, and that overnight became the go to -- the preferred way of shopping. So now they had to roll it out into all their stores and then not just a couple of people, but 10 people, 15 people in the store executing on that. And that is the use case that is dependent on having our type of solutions to be able to execute at scale. But you take that into health care with how to digitize the patient journey or collaboration between caregivers or into any of our vertical markets and the same theme is there. I believe this is a secular trend that has a long runway, and I don't see that any of our customers are looking to kind of revert back from the gains that they have taken.

If you just think about the relative growth rates for some of your larger earlier moving customers that really accelerated adoption early on in the pandemic, again, that's -- I think I'm correct in saying that a key driver of the overall company growth. And then you have this other dynamic with some small and midsized customers that are later in that adoption cycle. But how would you frame the relative positions of those 2 types of customers at this point?

Yes. So when -- generally, we see our largest, most advanced customers being the ones that adopt new technology first. They are the ones that can drive it first. And certain with COVID, we saw a large grocery, so certain parts of our retail customers, be the most active are focused on being able to kind of stay open, serve customers by digitizing automating their operations. So we saw a great strong growth from our largest customers in those areas. Over time, we've seen smaller grocers or other retailers like department stores now want to have the same capabilities. So if you would like to do buy online, pick up at store for example, and if you're now the smaller grocer, the one that doesn't have a national store chain or something, you need to offer that capability to retain the customer. Or if you're in department stores, this is now how your customers want to engage with you, you need to build up that capability. But we also saw manufacturers as an example, large parts of our manufacturing customer base were basically shut down in the beginning of COVID. There was no -- they were not deemed to be essential industries, making electronics manufacturing that was -- another TV is a nice thing, but it wasn't essential. They've come back and they're also now looking to see how they can leverage the same kind of technologies. And we see in manufacturing, in warehouses, some of the remnants of COVID, you can say in that more socially distant, being able to operate with fewer employees, both because it's hard to find labor but also because it's safer. So that drives a need for automation that is not necessarily new, but it's certainly a greater impetus for that today than it was.

So manufacturing is a topic I wanted to follow up with you on because in the past couple of years, it's gotten less attention in some of your other end markets. But on the last earnings call, it was one of the end markets you highlighted as being in a good recovery phase. So can you unpack what you're seeing there just in terms of, as you said, Anders, there was a lot of spend that was simply deferred due to the pandemic. So there's potentially a catch-up from some of that deferred spending versus you're in some kind of new adoption cycle where there are a lot of new applications and it's more of a secular theme?

Yes. Manufacturing had -- had been a little subdued even before COVID based on tariffs and other things that came out, and then it was hit kind of double whammy with COVID. So after COVID, it's come back very strong and it has been our fastest-growing vertical this year. Part of that is recovery, but part of it is also just growth. So our growth has been -- so we surpassed 2019 with a good margin. But the same themes around digitization and automation, creating greater visibility into the entire supply chain, being able to track and trace components from sourcing to manufacturing through distribution all the way to end users and manufacturing has a number of kind of unique use cases or areas. You have the assembly, which is what maybe people think mostly about. But warehousing is a big part of manufacturing, moving logistics within the assembly. So you take our warehouse automation solutions around fetch robotics, that plays right into a lot of the use cases around manufacturing, our machine vision, fixed industrial scanning portfolio, but also, say, manufacturing warehouse centric. So we've expanded our capabilities quite a bit around manufacturing also.

So let's shift to a topic I think a lot of folks will want to hear an update on your current operating landscape, particularly around supply chain. Two pieces to unpack there just in terms of component supply and freight capacity and you've talked to both of those in recent earnings calls. You gave -- on freight capacity, for example, you've given us a granular view into how much headwind you expect quarter-by-quarter, and I'm sure Nathan's played a key role and come into some of those assumptions. On component supply, you talked about potentially the middle part of next year, seeing some of those constraints ease. I guess my question is, how much visibility do you have on either of those? And to the extent that things don't play out the way you've expected, how many more levers can you pull on alternative freight modalities, new sources of supply, et cetera?

So if you break it into the 2, starting with the components, it's obviously a dynamic situation and tough to predict exactly how that plays out. But as we talk to our key suppliers, they're the ones telling us they believe that things will improve by the middle part of next year. And our teams are doing a phenomenal job of working both between supply chain, our product organizations, the commercial teams to manage a tough situation. And resiliency is something we've been working on for several years back to around tariffs of adding additional assembly capacity across Southeast Asia has been a benefit, as you've seen COVID outbreaks in different territories being able to flex manufacturing across different plants has helped, as well as working with our suppliers around making sure we get our fair share of product and giving them visibility to future demand as they build out their manufacturing capacity. If you look at freight and the transitory costs, we break it into -- we really think about 3 components. There's the price we pay per kilo to ship via air or ocean. That's now 3 to 5x what it was pre-pandemic. So just the pure cost of shipping. The second is because of some of the logistic bottlenecks, we're shipping almost 100% of our printing business on air versus ocean, where historically we do about 80% on Ocean, some of that is demand driven, some of that is just the bottlenecks around ocean freight. And then the third piece of that is expediting parts between our Tier 2 and Tier 1 manufacturers, again, just to keep up with demand. And we believe that through the first half that those dynamics should improve as we get through peak holiday season here in the fourth quarter, which is a driver around demand. You look at other things like the Chinese New Year holiday, again, with some of the manufacturing shutdowns early next year, again, should help balance out that supply-demand equation that will hopefully give us some rate improvement as we get into the first part of the year.

So I'll ask you a question we're going to ask repeatedly this week where no one knows the answer, but we're going to ask anyway. What's your best guess on when we'll be able to have a conversation where supply chain will be back to normal?

So if you went back to 2019, we were -- with tariffs, we were hoping by 2020, 2021, we wouldn't have to talk about tariffs and then COVID happened and now supply chain, now you have the capacity issue. So you look at this one issue and go maybe hopefully in the next year, 12 to 18 months, it's not a topic. But I think we have said the same thing about the last 3 challenges. I'd say our supply chain team is looking forward to the day that they're not the centerpiece. Supply chain guys don't like to be the center of action.

But I don't think there will be -- there's not a binary change. It's not going to be from what it is today back to normal. I suspect it might never go back to exactly the way it was, right. But I would think that the ocean freight is probably what's going to come back -- normalize first. Airfreight will probably need more commercial flights to be reinstituted and a little difficult to say when that will be, but I would expect by middle of the next year, assuming we have no new COVID-related incidents that we'll start to see more of that at least. And the semiconductor stuff is again it's not going to be binary. But when the semiconductor manufacturers, as they are back to normal, that means that their inventory levels are right. Before that, all the distribution partners is going to have the right level of inventory. Before that, the end user is going to have it. So I think we should see improvements in that also next year.

So let's move from supply chain and talk about software. It's in recent years tied to your acquisition strategy where you've made a number of acquisitions to expand your presence in the software space. Before we go into some of the details and specific deals that you've done, I just want to start, Anders, with the overall philosophy you have around investment in these kind of opportunities. What are some of the key screens you run when you think about the types of platforms you'd be interested in acquiring?

Yes. So first, we look at M&A as a vector of growth. And it's a way for us to accelerate our vision and our strategy is we don't look at the M&A as a growth driver in and of itself. We're not a portfolio company in that respect -- then it looks at how do we then can accelerate our vision of Enterprise Asset Intelligence vision specifically. And we spent -- we've invested a lot of time in looking at our various markets to understand where do we think we have some particularly attractive areas to invest in. And we came up with 4 areas earlier. We came up with retail store execution, warehouse automation or warehouse execution, machine vision, fixed industrial scanning and the small office, home office printing, so the cloud-connected printing solutions. So if you look at particularly with software has been on the retail store execution side, we felt there was a big opportunity for us to -- we had a strong right to play. There was -- we could see a number of changes coming, which -- where we felt that our devices would have -- be able to augment the value of software. So Reflexis became kind of our first platform that we could hang other things around. When we think about the software pieces, if you go back to the sense analyze act framework we have, the sensing piece tends to be the device-centric piece. They analyze and act more of software capabilities. So we've been -- we already had a very strong sense capability. But over the last 2, 3 years, we've particularly focused on building up the analyze and act capabilities.

Can you talk about some of the industrial logic there, where the software component can augment the value derived from your, let's call it, the legacy portfolio, more on the hardware side? But in terms of moving forward on some of those themes, what's your vision on, let's say, culture, for example. I don't know for sure, but potentially, there's some substantial cultural differences in, say, your legacy portfolio versus some of the pure plays where you've made acquisitions. How do you think about integrating those 2 to be where 1 plus 1 is potentially greater than 2, for example. On the sales force side, how do you think about if you're going to a customer where you want to offer a portfolio of hardware and software, who runs point on sales and how you make all that match.

So 2 things -- on culture and how we integrate. So first, culture, we spend a lot of time purposefully kind of thinking about our culture and development culture. When we -- for those of you who remember back in 2014, when we did the Motorola Enterprise acquisition, we said as part of that, you make a lot of decisions. You think that every decision is good because otherwise why make it, but some decisions are more consequential than others. We made a decision at that point to basically start over from a culture perspective. We brought in the third 5 most senior people in the company for 3 days to kind of rework our -- the vision, the mission, our values and so forth. And then we put 7,000 people -- as we were at that point -- through 2 days' worth of culture training. And that was a hugely impactful thing because it did kind of solidify kind of how we thought about culture. It's much more around the behaviors that we see. This is how we want to operate. This is how we want to show up. A lot of the expressions of works we have from that still is part of our vernacular and employee saw that as a great sign of our investment in our employees, in people, and we kept that. So now when we do acquisitions, we put them through our leaders in action, we call it training. I got actually e-mails yesterday from Antuit, they've gone through this training and feedback from people who've gone through it and they -- it was like 92 out of 100 scale from how valuable they thought it was. So it's something we put a lot of effort into. It doesn't mean every culture is compatibile with us, but it is part of what we do due diligence around. If we feel that the culture is not compatible with Zebra, we will walk away. So it is something we certainly pay close attention to. And how we integrate this, it's maybe less of a culture issue, more of a structure, how we look at extracting value, the role and acquisition will play in our vision. And we don't have a particular set playbook here. This is how we do integrations. I'll give you 3 examples. You start with Xplore, which was the ruggedized tablet company we acquired in 2017, I think. We thought of that as being kind of an extension of our mobile computing platform. So it was a very hard functional integration. Very quickly, we -- there was no Xplore per se. There was -- product development team was part of the product development teams of mobile computing. The supply chain team was part of our supply chain team. The sales team was part of the sales team. So it was a very functional hard integration. Temptime, which do temperature sensing solutions for -- particularly for vaccines in emerging markets. So a customer is more around world health organizations. We said that's a very different business, very little direct operating synergies. We kept it compound as a self-operating unit. And only now when they come together and say, we actually feel now that we have enough synergies across the portfolio, they themselves felt that they should integrate across our supplies business. And then you have our software business, which is maybe more indicative of how most of our integration goes. Here, we've created a brand-new software business unit. We tried a new leader for that business who comes from the software industry. We've put Reflexis into it, Zebra prescriptive analytics and a few other things. I think, 5 different software solutions in there. We created a brand-new sales overlay. We hired a number of people from -- who have sales expertise or software sales expertise in which we know they are a standalone group, comped only on our software sales, but they work with our broader sales organization in that we want our regular account managers to identify opportunities, open doors for us and help facilitate the sales process but have people with real software expertise, be able to really move the opportunity through the pipeline to close it.

So let's talk about a specific transaction from the not too distant past for Reflexis. It was a nearly $600 million deal announced in the middle part of 2020. Can you talk to what fraction of Reflexis business is run on your legacy devices? And how does being the largest player in the mobile computer space turbocharge potentially your ability to pull through that Reflexis sale or vice versa?

Yes. So first of all, Reflexis had -- Reflexis is a predominantly a retail vertical solution, but we also have a retail banking as a market for it. But if you focus on the retail -- traditional retail vertical, they had probably a couple of hundred customers. We have thousands of retail customers. So we saw a great opportunity to basically leverage our relationships to bring in Reflexis to those customers to -- we had the right to play, say, to have that conversation and be able to accelerate the sales process for them. Most of those customers then would be using Zebra devices, Zebra mobile computers. And we see great value of augmenting the value of the device and the software by having them communicate better together. So if you think of Reflexis, there's 2 types of solutions. One is the workforce management, which is more like scheduling and the other one is task management, how to make things happen in our stores. And so if Reflexis is going to look at getting more data to analyze and put into its analytics engine of what actions to take and how to prioritize them. So you can have a store -- front of store employee scanning a shelf-edge barcode to say, this particular good is out of stock that can inform the Reflexis task engine to say, this is a high-selling, high-value good. This needs to be prioritized immediately and send an action to somebody in the back of store to go do that. It identifies the person in the back store, it's somebody with a mobile device. So now you can affect -- you can mobilize those actions much better. You can get better data to have better higher return actions, and you can mobilize those much better. So there's a clear value enhancing for both of those. And so we see that we can then build up a nice suite of capabilities around this.

So on that same theme Antuit is a deal you mentioned before, nearly $150 million transaction you announced this most recent August. And really, the platform is focused on demand sensing and price optimization, which I think you've indicated previously is again largely sold into the retail end market. So I wonder if you could just talk to some of the capabilities of Antuit. It's gotten less attention potentially than some of your larger deals have. Just tell us a little bit about what the platform does? And then as you think about the competitive landscape, is it primarily where you're going against other pure plays? Or are you more competing against pieces of larger software organizations that are much more broadly diversified?

Yes. So Antuit is a demand sensing, a fancy word for forecasting to some degree, retail customers and CPG customers primarily. So CPG would have -- they would have campaigns or marketing events and making sure that they can forecast how many of their products they're going to sell those, are those campaigns being executed properly and so forth. But if you go to the retail store environment, this is helping to do much more granular forecasting down to SKU level by store. And that is much more important today with -- in an omnichannel environment because now you're not just having people come in traditionally through the store and buying. You're having e-commerce through the store or you're fulfilling e-commerce from a warehouse. So where do you keep inventory throughout distribution centers to warehouses to back of store, front of store. Antuit basically helps look at lots of demand drivers for this traditional point-of-sale drivers, but also are the marketing campaigns -- is if you're selling Coca-Cola or a beer is going to be a sunny warm weekend or not, schools returning quicker in the south than in the north. So all the components of that, we looked at with COVID. How did Antuit help its customers adapt and improve their forecasting versus traditional forecasting method and using the AI and machine learning algorithms that Antuit has, they were much quicker to help tweak what the new demand look like for those customers.

So we're at nearly 30 minutes past. I want to turn it over to anyone for questions, except I want to get 1 more in from my end and then we'll open it up. Competitor lawsuit is something that I just wanted to ask about. One of your larger competitors recently filed a lawsuit against you at the ITC. I'm not going to ask you to litigate in public today. But I did just want to get your take, Anders, because you've been in the business a while. You've seen these kinds disagreements in the past, and you've probably been on the both sides of them. So could you just give us some general sense on in your industry, how common is it to see these kinds of actions? How do they typically get resolved just looking historically? And how long does that process tend to take?

Yes. So first as a policy, we don't comment on ongoing litigation. So I'm not going to be -- should be able to share all that much, and I won't be able to speculate on why this happened and why this happened now. But I think I can share that we have the broadest portfolio of intellectual property in the industry. So we're looking at how do we respond? What are our -- how do we -- yes, what's our strategy for responding to this, and that's something we're working on now, but we will develop over the next month or 2. But unfortunately, I think in most technology industries, IP litigation is part of business. It happens, I think, all the time. And as we've gotten larger, we've certainly seen more of that. Our team is well versed in having to address those types of issues. Generally, the legal machine as it works slowly, but I won't be -- I don't want to speculate about how long this will take, but it's usually not something that works at warp speed at least.

Yes. Well, I'll turn it over to anyone in the audience who'd like to raise a hand and ask a question, and I'll do my best. I don't think I see mics on your table. So I'll just -- any question, I'll just repeat for the benefit of those webcasting. But raise your hands, if you have a question and we'll be happy to take any or I'm happy to keep going as well.

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So just to repeat the question for those who aren't here in person, the question is around the full potential of Zebra's portfolio, using as an example of a customer's single location. And then longer term, to what extent can you expand that opportunity set in the same context?

Yes. My thought was when you asked the question, the opportunity very much depends on what we can do also in the future. There's not like what we have today is set and defined -- this is the limit of what we can do. So if you think of -- you mentioned warehousing, warehouse automation. We've been in the warehouse for a long time. We've been providing automation solutions for frontline workers, primarily in warehouses, we acquired Fetch robotics this past summer, which is a way to augment the frontline worker with an autonomous robot also. That has opened up a brand-new set of capabilities for us and opportunities in the warehouse side. We've invested in the fixed industrial scanning machine vision portfolio. If you have a warehouse with, say, conveying system in that we can now look at tracking fast-moving packages or goods on the conveyance system. So we've expanded our capabilities quite a bit already, say, around the warehouse. But it's nothing to say that this is the defined set. There's no -- we now reached our limit. So I think we have still very sizable opportunity in our current addressable markets to continue to grow and expand. But it's also, as we look at other -- adding other capabilities to our portfolio where we feel we have a strong right to play.

The one thing I'd add is the value of the vision is we don't have to guess what that is. Customers bring us in to talk about the road map, what they're seeing is challenges, what they want in the future and how we can help solve those. So part of that is -- the broader vision allows us to have those conversations and understand what that road map could look like and how we can help support it.

So I'll ask a follow-up unless I see hands continue to go up. But on the Fetch transaction, you mentioned it was a nearly $300 million deal -- for an acquisition of that size, in this case, what was it about that opportunity where it's an earlier stage venture, I think, that you acquired? But presumably before you would pull the trigger there, there's a vision or maybe, Nathan, you said there's some kind of pathway where you go in eyes wide open on an earlier stage platform, it's a competitive landscape, but you've got to have some insight on why you can win. So what is that kind of insight and what gives you the conviction to move forward in that kind of context?

Yes. So this goes back to kind of how we developed our broader strategy. We looked at areas where we thought we had a particular strong right to play. I mean there was more ample opportunity to expand. The warehouse automation was one of those areas. We identified that probably in 2016, '17 as a real area. We invested -- we did a venture investment in Fetch robotics and other robotics companies too in 2018, I think it was. So we've been working with them for some time as they developed and grew and part of other fundraising rounds with them. And we came to point here when we felt that this was -- a number of reasons caused us to feel that this was a good time for us step in more directly. In that we felt we needed to be able to influence or own kind of the roadmap of what capabilities that we now put in next. If we are two partners working together, we can do certain things to integrate or optimize kind of the overall solution. But we can't do as much as we can if we are truly owning both sides of that solution. We felt that there was a great opportunity for us to differentiate by not just looking at optimizing the robot or the frontline worker, but looking at how do we optimize the entire workflow so that we can -- when we dispatch the robot to do a task, we can also communicate with a frontline worker to intercept the robot and execute the task that needed to be done.

And we use our venture portfolio as a tool to begin and learn the market, have the more strategic conversation. We had Fetch in our warehouses for several months. But before the acquisition, we had a co-sell relationship with them. So it wasn't as if we jumped into it and didn't know what we -- we saw the ability to sell together, and we saw the capabilities it had within our own environments that gave us the confidence to move forward.

So there's a buy versus build decision in a lot of these situations. And obviously, on the autonomous mobile robot side, you went the buy route. A recent build route example, if I could call it that, would be the fixed industrial scanning and machine vision. You did a smaller acquisition to enable that. But particularly on the hardware side, that was internal investment where you could roll out this new initiative. So walk us through the opportunity set that you saw there and when you decided to make some of the investments? And then -- maybe we'll start there, Anders, and I'll ask a follow-up on the same topic.

Yes. Actually, on Fetch, it was inorganic activity. But we actually started with SmartSight, which is we've developed an autonomous robot for retail to go up and down aisles and take pictures of shelf head. So we did that ourselves organically because we felt that there was -- what we wanted to achieve was better achieved by going organically. But then when we came to Fetch, we said we looked at what would it take for us to accelerate investment in that and to create this new Fetch-like capabilities, and we thought that was too much and too long. So we needed to do -- we felt we needed to accelerate that by going inorganic. For fixed industrial scanning, we felt that we had more on the building blocks ourselves to start building out that and there was no easy inorganic choice for us at that point. But Adaptive Systems was a software company that we looked at and we acquired to augment this. So we -- what Adaptive system does is they basically provide software libraries to make it as easy for our advanced customers to create or to incorporate machine vision and fixed industrial scanner in their workflows so they can accelerate the deployment, I mean, easier to deploy. And it fits very well into one of our true value propositions. So the value proposition we have around fixed industrial scanning and machine vision was one is around the upgradability of our cameras. So we can take a fixed industrial scanning camera, download new software and make it a machine vision camera where the industry competitors tend to have lots of SKUs that are very specific. And that was something we had to start from scratch in order to enable. And the other one is the ease of deployment. The machine vision tends to be fairly complicated implementations. It requires deep expertise from machine-vision channel partners or advanced customers, and we felt we could approach this with more software tools and automation to make it much easier for our customers to do. And we can accelerate that also by acquiring that component of it.

So as a follow-up there, Anders, let's think about a hypothetical customer where in the same facility, you have an opportunity to make a sale on the fixed industrial scanning side, in the autonomous mobile robot side, maybe you're the incumbent on the mobile computer side. How frequent is it that it's the same decision-maker across all 3 of those or maybe even in more potential sale opportunities, where you have the embedded relationship maybe through one of your legacy businesses and so you're going to the same person with a broader portfolio? Or does it sometimes get divvied up, so to speak, with your customers where you're talking to different people?

Yes. Historically, our relationship tends to be with more of the IT and operations teams. So the CIO would be a natural kind of senior executive with whom we would have a relationship. The CIO would tend to be involved in most of these decisions. But he probably spends more into operational responsibilities where we have kind of also have had strong relationship, but maybe not quite as strong. So we see this as a -- we can leverage the existing ratio, but we also see value in expanding the set of relationships we have to be able to identify other new opportunities for us.

Any other hands in the audience? Yes, please go ahead.

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Yes. So -- you want to repeat the question?

Thank you. So the question was in terms of the healthcare end market, if you could please comment on the takeaway win you announced recently and we'll start there.

Okay. So healthcare has been our -- not every quarter, not this year, but over -- if you look over the last several years, been our faster growing vertical. It's been our smallest but fastest growing vertical. It -- the catalyst for this has been around the introduction of electronic medical health records where you can append digital data to a patient's record or read that data, largely started off in North America for us. But we see now there was actually -- I think it was 3 different healthcare opportunities that we discussed at the last earnings call, one was North America, if I remember and 2 was outside the U.S. So the opportunity is expanding also beyond the U.S. becoming much more a global opportunity. The drivers for this has been around both driving increased productivity for healthcare providers. That's obviously a big issue in North America, but globally. But also, we address the quality of care. So the rate -- error rate or the risk of the medical errors is reduced when you deploy our type of solutions. And health care providers actually have a lower health insurance premium when they deploy our type of solutions because they have less malpractice suits. Now I said the discussions we have with healthcare customers are around how to digitize the patient journey so patients have an expectation of kind of the Amazon effect of people call it, right. Everything should be accessible digitally for you over the web or whatever, and we can track and trace virtually everything that's within the hospital. So the -- but another big part of what value that healthcare providers see now is around collaborations. So communications. Basically, we have push-to-talk functionality. We have PBX functionality on our devices. So you can easily -- so if you're in an ER and you want to -- a patient comes in, you can either kind of call a subgroup on push to talk to and get everybody to assemble very quickly at a certain operating room or something like that. So there's a raft of capabilities around, say, track and trace and collaboration.

So we have just about 1 minute left. I'm going to have to refrain from asking any more of my questions, but I would like to turn it to the 2 of you for any closing remarks you might have.

So it's fair to say that we're -- 20 months back, we would not have expected COVID to be catalyst for growth, but it has truly accelerated the trends around digitization and automation. And we see those as strong secular trends that are sustainable, and we feel we are well placed to capitalize on those and feel as good about our business as we've ever done, I would say.

Thanks, everyone, for your interest. Anders, thank you for your time. We appreciate it.

Thank you.