Zebra Technologies Corporation (ZBRA) Earnings Call Transcript & Summary

Please welcome to the stage, our first speaker, Vice President, Investor Relations, Mike Steele.

Good afternoon, everyone. Welcome to Innovation Day. Today, you'll hear from our management team on how our commitment to innovation, our differentiated portfolio of solutions and our extensive partner ecosystem have positioned us well for long-term profitable growth. But first a couple of housekeeping items. First, I'd ask you to silence your cellphones as this event is being recorded. And also I do need to inform you of our safe harbor statement. So this presentation will include forward-looking statements, which are subject to risks and uncertainties, and actual results may differ materially. Descriptions of these risks and other factors can be found in Zebra's SEC filings. So as you can see on the agenda, we'll have 6 of our leaders present over the next hour, followed by Q&A. At that point, our webcast will conclude, and we'll take a 10-minute break. After the break, Richard will host a customer panel, and we will close the day with tours of our Experience Center, which feature a sneaker journey through the supply chain as well as our solutions showcase. So with that, let's kick it off. [Presentation]

Ladies and gentlemen, please welcome our next speaker to the stage, Zebra Technologies' CEO, Bill Burns.

Well, thank you, everybody, for joining us. We're delighted to have you here in our Experience Center in Lancashire. We've got multiple of these Experience Centers around the world, and this is our largest, so thanks for joining us. I'm incredibly excited about the day. So I think that what you'll find is that the showcase of innovation and our customer panel that will talk about their challenges within their business and how do we ultimately meet their challenges. You'll have an opportunity to learn more about our solutions, of course, through those demonstrations and through the presentations today. You'll have time to meet our executive team. I'll introduce them at the end of my presentations. And Richard will host a panel of our customers. So you'll hear directly from them as well. So it should be a great day. Hopefully, you saw some of the demos already. There's more demos back in the back corner. There's places in which, boards on the back left here in which we show how we fit into different environments across our customers. So please take advantage as we wrap up the presentations to spend time with our teams see the rest of the Experience Center and then the demonstrations we have set up. From today, I hope you take away that we've got strong customer relationships, and then we're the preferred partner for our customers around the globe. And we'll talk about the verticals in which we serve. We'll talk a bit about and you'll see the comprehensive portfolio of solutions that we have that serve our customers across these vertical markets. And at this idea of digitizing and automating our customer environments creates an opportunity for us to continue to solve our customers' hardest problems across their business. And innovation is what we're about. Today's complex world that requires technology and innovation ultimately that we build at Zebra to be able to extend to our customers to make them more efficient and effective in their business each and every day and to better serve their customers. If we look at our advancing our vision, we think of advancing the vision in multiple different ways, and I'll spend time throughout the presentation talking about each. It's really about innovation is the heart of what we do. And we'll talk about Zebra 50-plus years of innovation and everything we're doing across the business, across each of our core adjacencies and our expansion areas where we're continuing to innovate across the business. Then we have strong secular tailwinds that ultimately will propel our business moving forward and that there's specific megatrends that will drive our business, that our portfolio is differentiated across each of the market segments we serve. And that we've got a connected ecosystem of partners, whether that's on the development side, all the way through manufacturing to our end partner community that serves many of our customers around the world. We'll talk about the strong culture of Zebra and ultimately our commitment to sustainability. And then as I said, you'll meet our experienced leadership team. So I think we'll have a great day today. I'm excited that you're here and joining us. 55 years of innovation. As I said, innovation is what we're about. And we continue to innovate across our entire portfolio of products, and we use things like patents. So 6,800 patents either issued or pending as a measure of ultimately our innovation. And we're very thoughtful about where we patent. We patent areas in which matter for the future for Zebra in advanced technology areas. And we registered patents across all the areas in which we invest in today. We're still innovating in the core, and our customers continue to expect us to do that while we're doing things in our expansion areas. And we'll talk a bit about that. All of those create a tremendous opportunity for Zebra and for you, our investors. About 10,000 employees strong around the globe, with a strong culture, as I talked about. I'll talk more about culture as we get into the presentation. About 10,000 channel partners. So these end channel partners calling on our customers around the globe that represent Zebra is a partner community that ultimately is in full support of Zebra and represents us to our customers in many areas. That includes not just our direct selling partners, but also independent software vendors that add applications on top of our devices, for instance, that make -- add more value to the ultimate end customer. We're the global leader in enterprise mobile computing. We're the global leader in industrial printing. We're the global leader in data capture or scanning. We're the global leader in RFID reading. And that matters to our customers is because they want to do business with the leader in the industry. It means that we have a seat at the table with them to be a preferred partner. It means that we're a trusted adviser across their business because of the knowledge we have across the verticals in which we serve here at Zebra. Not only are we #1 in the market share leadership, but also we're acknowledged by the industry analysts, whether it's AIDC or Gartner or Nucleus around our portfolio. And it's not just our core portfolio or expansion portfolio that's recognized. It's across all 3 in this example, where you see our mobile computing is recognized by AIDC, where our location technology in RFID is recognized by Gartner, and where Nucleus recommends or recognizes Zebra from a software perspective, our work cloud and workforce management software that leverages those mobile devices in the hands of our customers. So across the entire portfolio, we're getting accolades from the industry analysts that say the portfolio is best in class, both in our core adjacencies and the new expansion areas. The vertical markets we serve. So we impact workflows across our customer and whether it's retail and e-commerce, transportation logistics, manufacturing, health care or other markets like government or public safety, and we've got value propositions that resonate across these and that our customers recognize us for. So if we take retail, for example, the idea that we elevate the customer experience within a retail environment, meaning that either it's a brick-and-mortar store or an e-commerce provider, we make sure the customers served in the best way possible. We optimize inventory, making sure the right inventory is in the right place at the right time across our customer base. And we have software that ultimately leverage our mobile device that it allows them to engage their associates, the associates who work in the retail store to be engaged in a different way with communication and collaboration software, with task management software. So these resonate with our customers as they're thinking about how do I have more engaged associates, how do I better serve my customers, and how to have the right inventory at the right place at the right time. And we do that same thing across the other vertical markets. If you take kind of health care as an example. It's how do we make the patient's journey safer? How do we improve outcomes within health care? How do we have unified staff communication and collaboration within a health care environment? How do we strengthen the operational efficiency within health care? So each of these vertical markets, we've got themes in which we talk to our customers about, and they resonate strongly with them, and we can impact the outcomes within their business, whether it's better serving a customer or a better patient outcome or ultimately being more effective or more efficient within their business each and every day. If we think of the mega trends that support our business overall, we think of things like digitization and automation, the growth of IoT, giving something a digital voice because once it has a digital voice, then you can automate it. You can change the workflow across our customers' environment. The idea of mobile computing and cloud computing continue to grow and the processing power associated with that, whether that's on device or in the cloud. The idea that Tom Bianculli is going to talk a little bit about, our CTO, about the on-demand economy. And then where customers and consumers expect more and more from the services and from the delivery or in their vendors to deliver products and services closer to the point of which they're needed or demanded. And ultimately, artificial intelligence. So Tom will talk a little bit about that, and there's a demo in the back that talks about using a large language model on a mobile device, allows you to have what is to be assistant to somebody in a retail store, in a manufacturing facility. So how do we leverage AI across the portfolio? But these trends have strong growth rates over the next several years, and that's going to propel Zebra's growth. If we think of this framework of sense, analyze, act, we've talked about this for a while, but it's the idea that if you can sense what's happening at the point of productivity at the edge of someone's business. If you can give inventory or a forklift or a worker, a digital voice, and ultimately, you take that data from that digital voice and ultimately do analytics around it, and then you can take an action within your business, you can get true insights into your business that allows you to impact workflows, which allows you to better serve the customer or to be more effective and more efficient in your business. And this framework resonates with our customers. If you can give everything in your environment a digital voice, if you can digitize your environment, you can automate your environment. You can impact the workflows across your environment. You can have robots and people working together jointly by having information about where is the worker and where is the robot at any point in time. And we do this through purpose-built hardware, software and cloud analytics and soon-to-be on-device analytics with AI to deliver these outcomes to our customers. If we think of our culture and a culture at Zebra, we think about our people being really Zebra. Ultimately, our innovation is driven by our teams around the world. And the idea that our strong inclusive culture that we have across the business, married with sustainability and commitment to the environment and resource conservation is critically important to us and our customers around the globe and to you as investors. And really, ultimately, we think that Zebra is our people and the awards that we're most proud of, are awards that ultimately our employees do surveys, independent of Zebra and basically say how great a place we are to work. Those are the kind of the awards that I'm most proud of as CEO because then ultimately, it's from our employees saying, "Hey, is Zebra a great place to work?" And I think our commitment to the environment and sustainability is second to none compared to our competitors. If we think of our business overall and the idea that our core business, where we're -- the strength of our business ultimately across mobile computing and scanning and printing, where we're the world's leader, but also the adjacencies associated with that, that we have less market share or grow faster. So things like RFID, our supplies business, bioptic scanning tablets ultimately create an opportunity for Zebra beyond the core that either we have more opportunity to grow even more market share because we have less today or they're faster-growing markets. And we think of the expansion areas of things like our retail software leveraging our mobile device. We think you'll see a lot of our machine vision and fixed industrial scanning, which is closely adjacent to what we do in data capture solutions. And we think of robotics. So you'll see our autonomous modal robots out in the Solution Center as well. So all those areas are expansion areas and new areas of investment for Zebra that create growth opportunities. And ultimately, we see the vibrant core married with these adjacencies and ultimately, the expansion areas that's going to drive our 5% to 7% growth that we talked about across our business. Lastly, I'll introduce our executive team. Many of them you'll hear from today, or they'll be with you in the Solution Center as we wrap up the day. So Rob Armstrong -- the team is all over here, giving you guys the prime seat. So Rob Armstrong, our Chief Marketing Officer; Tom Bianculli, who you'll hear from, our Chief Technical Officer; Mike Cho, our Chief Strategy Officer; Richard Hudson, our Chief Revenue Officer; Cristen Kogl, our Chief Legal Counsel; Jenna Stanley leads our Services organization; Joe White, our Chief Product & Solutions Officer; and Nathan, who you know, who's our CFO. So we've got a great team with you today, spend time with them afterwards seeing the demo, ask them questions. Looking forward to a great day. I'll hand things to Joe White. Thank you.

Thank you. All right. Thanks, Bill. I appreciate that. Good intro. I'm Joe White. I'm the Chief Product and Solutions Officer, and I'm thrilled to host you guys this afternoon. It's not often we get to show off all the great stuff our product teams build and deliver into the market to our customers with such a great crowd here. So I spent 23 years in this space, building and contributing to this portfolio. So if I seem exceptionally excited about it, it's because I spent a lot of time and effort delivering to it. When I think about our portfolio itself, what's enabled me to wake up every day for the last 23 years and be excited to come to work and work with our customers has been really our relentless focus on innovation. We, as a company, have a relentless focus at looking at how do we push the boundaries, how do we explore, how do we change paradigms with our customers. And we do that with the Fortune 100 customers and beyond that we serve. So we're very intimate in the products that we build, design and deliver for our customers. They're differentiated not only in how we deliver on today for the problems we're solving today, but how we think about the future and how we're going to enable them in the future, and it really gives us a differentiated position around digitizing and automating customer workflows that no other vendor in the industry has. And so I think that's why our customers rely heavily on us and come to us and say, "Hey, Zebra, help me solve this problem." In doing so, as Bill mentioned, we're equally committed to providing environmentally sustainable solutions, whether they're solutions that we're delivering for our customers and many of our products and the things that we solve for our customers actually help them meet their carbon footprint targets, or the products themselves that we build and deliver, and we'll show you a little bit more about that as we go throughout. So if there's one thing that I ask as you walk away, hopefully, you see that Zebra is shaping a better and more sustainable world through the products and the innovation that we're delivering into the marketplace. And hopefully, that's something you take away from here today. In terms of investment, so I manage and I help deploy with all of my broad product organization. About 10% of our sales gets invested in R&D as a percentage of sales. That R&D, you can think of it, Bill outlined core adjacent expansion. You can think about it, about 2/3 of that goes into the core portfolio, keeping that portfolio fresh, innovative, solving new problems. I'll talk about some of those capabilities that we deliver in the portfolio. The other 1/3 goes into our adjacent and expansion markets to really where we take advantage of the core portfolio and extend that portfolio, solving other customer use cases and unlocking more value and benefit to them. So the product portfolio is broad. I think if there's one thing as you in the room walk away with today is the breadth and depth of the portfolio that we have at Zebra. Certainly, a slide doesn't do it justice. The products here are just -- I've shown at a product family level. But as you go through the demos and the tours, you're going to be able to see the breadth and depth of that portfolio. But the top 3 are our core portfolio, as Bill mentioned. Those things -- those 3 are #1 market share across the globe in those products. They are the foundation of what we've expanded upon. If you look at the bottom 4, that would be our adjacent and our expansion portfolio, and they would all really fit into the bucket of automating, if you think about it, whether it's automating the productivity of a worker, whether it's automating the operations and workflows within our customers' environments. And so robotics, RFID, machine vision and retail software are those adjacent expansion portfolios that we have. So this portfolio powers real-time supply chains across the globe like no other portfolio in the world. By the way, most of these products, you will see throughout the demos throughout the day. Speaking about demos throughout the day, Mike Steele talked about the journey of the sneaker. And for those people that are online, I wanted to kind of walk through the journey here with you today. The journey of the sneaker, if you will, and of course, for those that are in the room, you got to put your imagination hat on a little bit because we're turning our demo center into a manufacturer or a warehouse and a retail store. But imagine placing that order online for the pair of sneakers. Zebra Technologies will touch that product through the life cycle and journey of that product, to the point where it hits your doorstep, about 30 times Obviously, that's a demo scenario, or I'd call it an example customer scenario that we laid out. Depending on the scale and the size of the operations and the product portfolio, it may be more than 30x it may be slightly less. But that whole portfolio touches the customer in different ways. If you look at the factory environment, whether it's the labels that we put on the boxes that ship out from the factory, whether it's the machine vision cameras that inspect the quality of the products, what's being delivered, what's being sent to the customers, or whether it's the digital passport that we're giving that product as it goes through its journey in case it ever was found to have defects and comes back and gets returned. We're doing that right at the source at the factory. From the factory, you'll go to the warehouse. In the warehouse environment, our products will once again touch, whether it's mobile computers, our wearable portfolio, for picking and put-away operation, for shipping, for receiving, whether it's our robotics, automation, for e-commerce fulfillment or goods transport across that operation or RFID, which is automating visibility touch points throughout that supply chain, we are touching that. Zebra has a place in the warehouse. Then it goes to the store, it ships to the store. And if you go to the store, Zebra also touches it there. We're known for being prevalent in retail. We have a big footprint in retail, whether it's in the hands of the store associate who's helping customers or in the inventory stocking operations, whether it's at the check point-of-sale checkout or the receiving door in that store environment, Zebra is touching that product and providing visibility throughout. And last but not least, the last mile delivery, when it shows up at your doorstep, and you get that ring doorbell notification that your package has landed on the doorstep, that picture is coming off a Zebra device where they've taken a picture on your doorstep and send it back to prove that, that delivery was done with delivered on time and good quality. Those are all Zebra products. And the thing that I would highlight about this, these are not optional for our customers' supply chains. These are mission-critical to give them visibility of their supply chains. These are not things that customers can say, "Hey, I'm not going to do that anymore." You, me as a customer, we expect to get real-time visibility of where our products are that we ordered and when are they going to be delivered. And Zebra does that, on average, 30x through that supply chain. One of the things you're going to see as you tour the backroom is you're going to see workflows for other verticals where you'll see how Zebra touches that also not once, not twice, but dozens of times through the workflows of all the verticals that Bill highlighted earlier. One of the things I wanted to highlight is we do have a world-class portfolio of hardware. We've had a long history of developing world-class hardware. It's purpose-driven, purpose-built. It's highly differentiated in terms of the quality and the reliability that our customers get, but I'd also highlight the breadth of that portfolio gives us the ability to deliver digital platforms to our customers. These digital platforms allow our customers to launch digital services, whether it's to a store associate, a field service engineer, those digital platforms become mission-critical for them to get capabilities out. Bill mentioned this, but I'll reiterate, Tom Bianculli, later on today, we'll talk about AI. AI is a digital service that our customers are looking to get on top of our platforms. And I'll leave that for Tom to touch on. But if you think about our portfolio and my engineering team, about 2/3 of my engineers are software engineers. And what are they doing? They're delivering software value adds on top of those hardware platforms, those capabilities we call Zebra DNA. Zebra DNA has been mission-critical to help our customers scale, manage, deploy our mobile computing platforms, our scanners, our printers into their operation at scale. And that's something we continue to invest in. It also is designed to provide security services. Something in today's world is very important for our customers is to make sure that the assets at the edge are secure at the edge. Last but not least, we also deliver value-add productivity tools, and I'm going to talk about them in the next slide. Three examples of value-added tools that we deliver on top of our platform. And again, I'm just giving you 3 out of dozens that we provide our customers. Some we provide at free, some we provide at a cost, some are as a service. So 3 of them. One is work cloud enterprise suite. Last year, we announced Workcloud. Workcloud is a combination of our software assets for retail that we put together, and Workcloud addresses how do we improve the quality and the productivity of 2 of our customers' most valuable assets: their people and their inventory. And so how do we drive productivity gains and how they work together? Bill talked about this enterprise collaboration, push-to-talk communication between associates on the floor, how do they get real-time information. Task management, workforce management, how do I do scheduling, how do I make sure I got the right people at peak demand time for the shifts that I need to cover my operation. And last but not least, how do I get more predictive around demand planning, especially at a time where demand has swung quite a bit over the last couple of years, these tools are mission critical for delivering productivity at the edge. Second example I'll give you is WorkstationConnect. We -- our mobile computers actually turn into fully managed operational desktop solutions. And the image you see here is a health care environment. As our customers go from mobilizing workers at the edge of maybe 1/3 of their workers to actually achieving full mobilization of all their workers, a trend that we've been seeing amongst all our customers as they mobilize more and more capability at the edge. And you think about it when you're delivering digital services, connecting your workers becomes an integral part of that. Also providing the ability to operate at a desktop level provides a new capability, unlocks new value that they haven't had before. In fact, our customers look at it and say, "Hey, I can reduce my carbon footprint by removing PCs that are in a shared environment, taking them out of my environment, and I can just put more mobile computers in the hands of my workers because I want to mobilize them anyway." And so the ability for them to cradle that mobile computer and get a managed desktop experience, in this case, sharing patient exam information with their patients, this unleashes all kinds of new power for our customers. The third area that I'll highlight is Zebra Aurora. This is our machine vision, our world-class machine vision software. Zebra Aurora, think of this as the old coming together with the new. We have a long history of barcode scanning algorithms, best barcode scan we created there. They're the best in the world, right? Over 50 years of creating barcode scanning algorithms. We've now married that with our machine vision capability from adaptive vision with OCR capability, with Matrox around 3D imaging and machine vision capability. Those all come together combined in Aurora, which is our software suite, which is really instrumental for digitizing and automating at the edge. In factory operations, in supply chain operations, we're able to actually deliver quality inspection, we're able to provide real-time visibility, condition of the packages as they go through the operations, all with that Aurora software. Once again, you'll see all these in operation here at the Experience Center today. Of course, sustainability. We mentioned that earlier. It's very important to us. It's important to me as a product leader, building sustainability into our products. Not only do our products solve sustainability issues for our customers, I gave the example earlier of pulling out PCs that might be idle and shared in a shared environment. But all across their operations, we can help them become more sustainable by driving better productivity, delivering better life-cycle management of the products we deliver to them. But last but not least, we have accountability to sustainability as well. We're committed to that for our product portfolio. We're investing in how do we make sure the products themselves that we build are more sustainable, recyclable or can deliver to their carbon footprint in ways that they can't do on their own. So this is something we're very committed to, and we're very committed to providing our partners and it's very important to us. So in closing, hopefully, you heard from me a little bit about how Zebra is shaping a better world to be more sustainable through the products and the innovations that we're creating. And hopefully, you experienced that through the operations as you explore our Experience Center. And so with that, I'm going to say thank you, and I'd like to introduce Jenna Stanley. She's going to cover our Services portfolio.

Thank you. I'm Jenna Stanley. I lead our customer success sales team and our global service portfolio and excited to speak to you today. As you saw from the very diverse product and solutions portfolio we have, Services has continued to transform to be a value assurance and value acceleration engine for our customers to help maximize their return on those investments. Our portfolio is underpinned by our Zebra OneCare life-cycle support offer that provides the strong foundation for our customers to make sure that, that investment is always working, always available to their employees and ensures that there's no disruption to that supply chain or retail or health care workflow in which we are tightly embedded with our product portfolio. Our Zebra OneCare offer allows customers access not only to our 7 centers of global excellence with our technical support engineers, but it provides them ongoing entitlement to those software and operating system updates that Joe spoke of, our mobility DNA and our other solutions software, and it allows them access to our excellent repair and reverse logistics capabilities around the globe. I feel we have a very differentiated offer. We've placed 54 depots worldwide to be able to help customers minimize cycle time for repaired equipment to minimize that spares pool or critical spares they need to have on-site and help them invest more efficiently. We've got support for 17 languages with our technical support teams, and over 50% of the resources in our call centers and depots are Lean Six Sigma certified. They are always looking at how to drive continuous improvement to increase customer satisfaction and value, and that's a culture we're extremely proud of. But innovation doesn't stop at our product portfolio. We're also innovating and leveraging AI in our service workflows. So behind our Zebra OneCare support, we have a VisibilityIQ OneCare portal, which allows our customers and partners to see real-time case status for their technical support cases, their repairs, their operating system and software release updates so that they can gauge the history and volume of their business from a support perspective. We also have leveraged Salesforce's Einstein AI platform to help us improve our technical support so that we can offer customer support 24/7, 365 through our Zebra support community, where we're clearing about 30,000 cases a quarter, both completely self-service using our knowledge base or with our Zebra virtual agent. And then when those cases can't help them resolve, they come into our call center centers of excellence. So we're leveraging technology to help make ourselves more available and we're leveraging that capability to even increase our 17 languages to be able to translate into more. In addition, our innovation includes programs that help our sustainability mission, like Joe mentioned. We've got a circular economy program where we're recycling and reusing between 150,000 and 200,000 of our mobile devices each year, bringing them back in to either offer refurbished units to extend customer life cycles, tear them down for parts or help our customers recycle them effectively. That's saving not only green space and landfill space, but it's helping us recover about $4 million in cost per year. So excellent innovation happening even at the foundation of our support services. But as our portfolio has continued to grow, and we've deepened our workflow solutions across verticals, we've also continued to grow our professional services and managed service practices and are bringing innovation in those spaces in very targeted areas where we can help customers design their workflows, implement complex configurations and then optimize that with our managed service through their life cycle. This is helping them accelerate time to value by deploying quickly and then optimizing that outcome success throughout the life cycle. So we've been continuing to grow over the last several years our remote engineering skills, our functional consultants, our data scientists who can help customers accelerate that time to deployment and optimize that managed service outcome as well. Let me take a minute and tell you about 3 customer examples that help illustrate those capabilities and values. All 3 of these customers are utilizing our vast Zebra OneCare offer. They're also using our VisibilityIQ Foresight offer. That offer helps analyze health and availability of all their devices at the edge to make sure they're powered, they have healthy batteries, their connectivity is strong, that the applications running on those devices are the applications approved by the company properly as well as making sure that they can see history and trend where devices need to be within and across their sites. So underpinned by Zebra OneCare support and our VisibilityIQ Foresight product, each of these customers is also leveraging some of our advanced services. Royal Mails is leveraging our managed service product. We are ISO 27001 ITIL managed service, and we are helping them execute device availability and IT workflows to keep their 90,000 Zebra devices in service across all of their depots and out on their mail routes. With FedEx, we are helping them design some of their locationing and RFID solutions at the edge of the network, so they can deploy them quickly and they can ensure across both ground and express that they've got those optimized. We're also helping them integrate some of those RFID workflows into the applications on their handhelds and in their back office with our PS application development team. And then lastly, Walgreens is one of our deepest Services' customer partnerships. They're managing all of our work cloud retail software solutions that Joe referenced. And we're heavily embedded helping them design their labor models. Think about how to drive task workflows to optimize employee productivity, pushing that through and helping them with their demand supply chain forecasting to make sure they have inventory in the right places across their network and then also helping them do loss prevention and predicting where they may have fraud or issues with appropriate program and pricing management at the edge of their store network. So we're very tightly integrated across not only their core, but our adjacent and solution products to help them be successful. So that's a great quick overview, and I'll introduce our Chief Revenue Officer, Richard Hudson.

Good afternoon, everybody. It's great to be here, leading Zebra sales organization across the world as our CRO for the company. I'm really excited to have this opportunity, but also to be able to spend time with our customers around the world explaining to them how we can address some of the biggest issues they face in front of them right now. So in the next few minutes, what I'd like to do is talk to you about our go-to-market strategy and what we do to really accelerate outcomes for our customers in the field. And we do that not in isolation, but together with a completely connected or interconnected group of partners and solution providers around the world and able to deliver the outcomes our customers are expecting. So today, we serve 80% of the Fortune 500 list, and as I said, we do that with a very large partner community. In fact, we want to be the partner of choice for our partners. Bill mentioned earlier, we got 10,000 of them. 10,000 partners around the world delivering and presenting Zebra's proposition to our joint customers. It's our expertise that we bring with those partners and workflows across the different verticals, across transport and logistics, manufacturing, health care, government and public safety and being able to take those workflows and understand the customers' problems and being able to address solutions to them. And in fact, later on, if you go to the back of the room, you'll see a number of boards outlining how we map out the workflows and how we demonstrate to customers how our solutions can really address the outcomes and the problems they have. It's together with the partners that we were able to bring that to life. And it's important that we do that in order to build these strategic relationships and to be considered as a strategic partner by many of our customers around the world. And certainly, you're going to hear that later on, for those in the room anyway, from a customer panel when I get a chance to interview those live with you today. So being a strategic supplier is critical for us. You can see from the chart, we supply a broad range of customers around the world, a huge number of brands, helping them address the issues they have in asset visibility, driving efficiency and production -- or productivity, I should say, of their operations and helping connect and enable frontline workers across their businesses. In our core markets of retail, T&L and manufacturing, we've got the largest installed base out there in the market. We've got years of continued collaboration with our customers, and that experience and knowledge really helps drive thought processes and innovation at the edge with our customers. But it's much more than just selling devices. Jenna just showed you a couple of fantastic examples on the screen. Just think about what she showed you on Royal Mail, how we're managing 90,000 devices across their estate, helping them keep their operations effective and productive as they focus on what they do best. Of course, they buy the leading devices, but they're buying service wraps and the software platforms and innovations that Joe White demonstrated earlier on to give them compelling advantage with their customers in the market. Now customers say to us very often, there's really 3 different things that they value for us. They obviously value the great products and solutions we offer, but they value insights that we provide because of the customer base we have and the ability to be able to connect them to each other, share problems and be able to address those problems or prove we've addressed those problems elsewhere in the world. They love the way we understand their workflows rather than just coming in and trying to position a product, helping to really focus on what their problem is and deliver the outcome they're looking for. And they like the way we proactively try and engage. The way we try and proactively identify where problems are and work with them to drive outcomes to their problems. This is really important. And hopefully, you're going to see that demonstrated later on as well when I sit down with some of our customers on the stage. I've mentioned partners a number of times. Bill mentioned the strength of our partner ecosystem of having 10,000 partners across the world. Our go-to-market is complex, but we've got an interconnected system of partners that makes our value proposition really compelling and very difficult for others to replicate. Together, with our partners, we're able to deliver on the outcomes that people want by putting together the best of breed of what the customer really needs to buy. But if we think about how a customer buys, if I can just direct your eyes to the chart at the moment, if you think of the customer at the center of what we're trying to address, we're spending a lot of time and focus on ensuring we understand the different personas within the customer. Of course, we have to engage with the C-suite where we can. And you'll see we are doing that with a number of our customers around the world. We have to engage with IT to make sure we're the supplier of choice. We meet the security criteria, and we're helping, but increasingly, as we try and address outcomes for our customers, we're getting pulled deeper and different to the operations. And I want to demonstrate that with a couple of examples in a minute. And that can be various parts of their operation overall. But as we address that problem, the Zebra team and the partners coming together in this interconnected system is what really helps us drive the value of the market. We've got multiple teams you'd expect across the business, be that customer success, solution specialists, account managers, vertical specialists. And of course, we need that, and we have lots of those. And it's that depth of knowledge that's critical. On the partner side, we have partners focused on different areas as well. They're trying to influence outcomes with us. Sometimes they're integrating solutions. And sometimes, they're just positioning component parts into what's needed in the market. But what's key is how these 3 things all come together. But to make them come together and to enable our partners to deliver on what we want, it's important we have a framework, and we absolutely have a framework for our partners to operate in, we call it the PartnerConnect program. Within that program, we've got multiple tracks. In fact, we've got 14 different specialized agents. And on the screen, you can see how we try and segment that, be that by solution type, by technology or by market, that could be a geographic market, it could be vertical market, but specific segmentation to clear track for us to go to market together. It's important to us that our partners are qualified, and they understand what we're trying to position. At the end of the day, they're representing us in the market. We have to ensure they've got the correct skills the industry expertise that's needed and the ability to deliver on behalf of Zebra. Let me give you an example because I think it's easy to talk about programs, but let me try and bring this to life with something that's actually happening in real. In this example, we partnered with a company called Silent Technologies. The solution we're talking about is actually around RFID. It's around location and then tracking of different assets in a fire and rescue district. In fact, this is the fire and rescue district in Bonita in Florida. I think it's in the top 10 largest in the U.S. And they engage with us really to try and understand how we could drive efficiencies in their operation. They needed to manage inventory and track assets in real time. And this solution, where we've done exactly that through the RFID technology, gave them a payback on their ROI in 1 year. It managed them to reduce the cost of their disposables and their medications by 50%. And then the time they focused on looking at inventory assets was reduced by 95%. And overall safety improved dramatically in the operation. Amazing, right? RFID, all the way through to an outcome of improving safety of their workers and improving and maximizing the dollar spend on the fire and rescue service. A fantastic example where we managed to enable tax-efficient dollars for the fire company to be more effective. Now I've used the public safety or government example. That's just one of the many sectors we cover. You heard from the team, the other areas. In fact, our addressable markets cover retail, manufacturing, T&L and public safety. And if you take these 5 verticals, I'm showing you, they probably represent about 90% of our addressable market. We have clearly known for our presence in retail, which is why I wanted to give you a different example. And you'll hear from some different vertical markets later on in the panel. But it's about the partnership we have in trying to drive activity into these verticals that is increasingly key. One area we're putting more focused on is manufacturing. And I wanted to use another example in manufacturing. This time, I actually want to use Del Monte Foods. With Del Monte Foods, we partnered with another company called Tensor ID, this time using their software, together with one of the areas we're investing heavily, in fixed industrial scanning and machine vision to improve their ability on tracking labels on cans of food. Now why would you want to do that? You're probably asking. Well, they have production inefficiencies in their workflows. There's potential health risk if they label things in the wrong way, they weren't going to get the right outcome and they would create health issues in the market. And there were certain fines that needed to be able to mitigate through risk mitigation, I should say, by managing noncompliance. So we, together with our partner, implemented a fully automated system using fixed industrial scanning machine vision technology with the partner software to be able to improve the label accuracy. It slashed the downtime of their plant, made them more effective. It improved their compliance and it cut their costs, achieving near-perfect accuracy in packaging management and factory operations. We're seeing more and more examples like this every day as we work through and talk to different customers around the world. So to summarize, I hope I've been able to demonstrate to you how Zebra are working with the Fortune 500 and thousands of other companies around the world to bring value. I hope I've been able to demonstrate to you the strength of our partner community, that 10,000 partners of resellers, systems integrators, solutions integrators, ISVs across the complete gamut of what we do. And I hope I've been able to demonstrate to you that by focusing on the outcomes our customers are looking for, together with our partners, we're able to make the market and our customers much more efficient. With that, I'd like to pass over to our Chief Technology Officer, Tom Bianculli.

Good afternoon. I'm Tom Bianculli, Chief Technology Officer here at Zebra. And I'm really excited to talk to you today given the rate at which things are changing. If you look at the technology landscape, you look at industry dynamics, they never been changing faster than they are today. And it's with that backdrop that I want to highlight why this is such a relevant time for Zebra and what does it mean for the future of enabling digital innovation. So we like to take a look through the lens of our customer. We always put the customer first, as you just heard from Richard. And these 3 themes, I think, have jumped out across vertical markets as really being a triple squeeze, a triple set of things that our customers need to deal with that are fairly unprecedented. First is the cost and shortage of labor. Korn Ferry estimates that by the end of this decade, there'll be $8.5 trillion of unrealized economic output because of a labor shortage of 85 million workers. And just to put that in context, $8.5 trillion is more than the GDP of Germany and Japan combined, and 85 million workers is more than the population of Germany alone. Diminished predictability. We heard about the on-demand economy from some of our other leaders and presenters, the idea that there's more choice, there's a longer tail, there's more and more through social media curation of what we get to select and get delivered and get delivered in the moment of need. So a lot of that is happening in shorter and shorter times with more and more variability, whether it's in a B2C or a B2B context. And that $1.8 trillion is just an example of that, in that it represents the costs due to out of stocks or overstocks in retail from an annualized perspective. So in 2023, $1.8 trillion of loss because of out-of-stocks and overstock, fundamentally not able to predict what should be on the shelf accurately. Changing customer expectations. Think about the number of ways that a product can be fulfilled; from the number of ways it can be picked; the number of locations that can be shipped from; ways that it can be received, curbside, at your doorstep, purchased conventionally inside the store. When you look at the number of permutations across all of those different ways of buying, picking, packing, receiving and delivering, there's over 3,000 combinations, and there's only a handful of combinations that provide the most optimal profitability. You fundamentally can't choose the exact right route to the customer without using AI, automation and more fundamentally than that, without having visibility of your products, your people, your inventory in real time. And that's the heritage, the legacy, the foundation of what Zebra is all about. It's about converting the physical to the digital. And so there's a lot of talk about the rapid technology advancement that's happening out there for machine learning, the data analytics, robotics, quantum computing, 3D printing, generative AI. I was joking with somebody today that every 3 hours, there's another announcement around generative AI. If you look at what's happening, I mean, there's 3 or 4 or 5 announcements today that are coming across our radar screens around generative AI. And we see ways of kind of removing the noise and going right after the opportunity, and I'll talk a little bit about what that looks like. But what's often overlooked is that all these technologies are really in service of one underlying dynamic. And that's enabling this on-demand economy. And there is a Prof. Wolcott, who's a professor at University of Chicago and Kellogg Northwestern, who I think has said it really well. We did quite a bit of work with him. We co-presented at MODEX in the last month or so with him around a new book that he's launching called Proximity. And the notion of proximity is that one of the most powerful forces reshaping markets is that production and provision of products and services ever closer to the point of demand. The idea that there's -- if you take it to the limit, an infinite selection of product or services, and I mean that in the full extent of it, you could think of transportation is becoming a service, right? So if I'm on the street corner and request a ride, I can digitally hail that ride and have it be delivered to my moment of need without hearing scheduled it before. The same thing for physical products, and that's just becoming a wider and wider selection of goods and services. At the same time, what's compressing is the amount of time that those services are being delivered in. That's getting closer and closer to 0 or on demand. And as a result, what got us here isn't going to get us there. So the idea of innovation happening from a, you know what, I'll innovate and I'll rise to the challenge of dealing this on-demand world, by creating a more frequent plan. That's what I'll do. Instead of my plan being a weeklong, I'll make it 3 days long or I'll make it daily, I'll make it hourly. Well, if you take that to a limit, it's not about a plan at all. We think the fundamental idea of a plan essentially goes away in terms of running operations, if you're going to be competitive in the future. It's about streaming operations as opposed to running on the planned treadmill faster and faster. So digital innovation is moving from the core of the enterprise, the IT closet, to the edge. And it's not about systems of record alone. They're certainly not going away. All of those systems of record, you see on the left-hand side, but they're going to be very much augmented with systems of reality. And what we mean by that is not just having a plan about what's happening in your operations but literally knowing where your people are, where you are within a process, where your inventory is, where are your capital assets, like your Ford trucks, your vehicles over the road. And if I know where all those components are in real time, and I've got on-demand inputs coming in, I can orchestrate all those pieces on the board in order to get the most optimized outcome. And if you don't do that, you're going to be out of business. And if you do, do that, you'll compete and succeed. And our customers are relying on us to help them deliver on that challenge that they're dealing with every day. And so with all the technology I spoke about and what it's in service of, we really think about automation being powered by AI in service of this on-demand economy, but delivered through 3 interconnected capabilities that you see here. The first is around asset visibility. You could think about this as what is it, where is it and how is it? What is it? It's the location. Sorry, what is it is identification; where is it is location; and how is it is understanding its condition. We've got a really wide portfolio, whether you think about RFID, machine vision, computer vision, temp time, sensing technology that you'll see in some of the demos, where we can provide this unprecedented asset visibility to really understand what is it, where is it, and how is it, whether it's a product, people process, being able to have that information. And then the opportunity really becomes one of an AI-driven opportunity because artificial intelligence is only as intelligent as the data that's feeding the training and developing the inference that derives the insights off of that training. So we really see an amazing opportunity to leverage all of the asset visibility that we help deliver every day to train models, model the real world using artificial intelligence, and then deliver those insights and orchestrated actions to where. Well, you don't get any ROI by simply having visibility. You don't even get ROI by having visibility that derives insights. You get the ROI by delivering the insight to the right part of your operations effectively and with consistency. And that's done through the 2 other areas of capabilities you see on here, connected frontline workers, enabling the foundation of the #1 market share positions we have in mobile computing and data capture to effectively get that information to the right worker or in many cases, it will be to intelligent automation part of driving thesis behind us acquiring companies like Matrox, like Fetch. As Joe said, a lot of those adjacent and expansion areas really plays on automation, machine vision, RFID, robotics, some of them are physical automation like AMRs, others are data capture automation through cameras and RFID sensing, but ultimately, it's delivering or capturing that information to the right intelligent automation endpoint. So I want to just walk through a couple of real-world examples of how we're doing this today, how we are seeing some emerging areas and even ones that are yet to be fully deployed but we're starting to get traction with customers on. So the 3 examples we'll kind of cover that horizon, if you will. So enabling flawless fulfillment. The challenge here, and it's an amazing one, if you think about in the world we're living in, where you buy online and you have something shipped from a store within a couple of hours. The reality is most retailers, on average, have about 65% inventory accuracy. So imagine they're trying to receive an online order that's coming to a store, promised delivery to you essentially in an SLA, like you're going to get it in the next day or the next number of hours. And then that whole thing falls back on the fact that they only have 65% inventory accuracy. So when the order goes to get shipped, if it's not there, they've just created a disappointed customer. Well, what if these walls could talk? What if the walls of the retailer could talk? And in fact, they do, you're going to see that in the sneaker journey demo when we get into the retail space. RFID, I was speaking with [ Keith ] earlier, [ Keith Olson ], is really going through a renaissance. And you see that in the growth of RFID. You see that in the demand. You saw it in some of Richard's examples, where it's not just about portal readers, it's not just about handheld RFID readers. It's about ubiquitous RFID reading through appliances that can be installed in a ceiling and have perpetual visibility and through mandates that folks like Walmart have spoken about where they are deploying RFID tagging across their store and being able to use the ubiquity of that tagging for more and more places along the supply chain. So think about this as a smart sensor-enabled store and don't think about it as some futuristic thing. What I would tell you is there's not an apparel retailer on the globe that isn't either deploying or looking at deploying RFID because when you look at the product mix of apparel, you look at the margin profile of apparel, you've got a high mix product, a small number of any one type of SKU on the store floor at a given moment. And so using RFID to have perpetual visibility allows you to redeploy precious labor, given the labor challenge I mentioned earlier, to other higher-value tasks and drive maximum top line by ensuring you have on the shelf, what the customer came into the store to get or what your store staff needs to ship from the store to home. Reducing food waste. Some phenomenal statistics here from the World Food Programme as part of the World Health Organization. 1/3 of food produced for human consumption is lost or wasted globally. That amounts to over 1 billion tons per year. On the order of about half of that is just because of environmental condition that it's exposed to as it moves through the supply chain. And Leo Lowy, in one of the demonstrations you'll see in the product bar area, will showcase that particular solution on what we're doing there. But what that looks like is being able to use environmental condition monitoring. So when I mentioned asset visibility, I spoke about understanding how it is, what its condition is. So a data logger from Zebra that you see in the upper left can be put on a pallet of perishable goods. This could be like produce that was picked to a farm that's placed on a truck that you see here that's on its way into the retail supply chain. And we're able to actually log the temperature, the humidity that, that shipment of produce is being exposed to. We're able to backhaul that either through our own WiFi to WAN bridge, you see in the middle of the slide or through the mobile computer that's in the cab of the vehicle, get that back to the cloud and then working with partners. Once again, this is a great example of applying AI based on the type of produce that is, if they can understand from the time it was picked, what environmental conditions it was exposed to over time, they can actually predict the time at which those, that produce will perish with a very high degree of accuracy. So what that allows us to do is drive the price markdowns of that produce in a way that is ensuring that there's 0 left on the shelf by the time it parishes. What does that do? There's 2 amazing things at the same time. It optimizes the profit for the retailers selling that produce and it minimizes the amount of waste by the time you get to all of that produce being sold, so there's no loss or waste in the supply chain as a result. So really powerful capabilities around condition monitoring. And then transforming the front line of work. This is one of the ones that we're really excited about. Bill and Joe mentioned it. Take a look at the statistics here. Retail worker turnover stands at 95%. The average cost per hour of retail labor has risen 14% year-on-year. Our retail customers need to retain the workers they do have. They need to more quickly train workers that are coming on board and they have to make them competent faster. This is something that one of the industry analysts, you see here in the upper right of this slide, refers to us reducing the time to competency. So just to set this up real quick. What we did is a few different things since the beginning of the year. One is we were together with Qualcomm and Google at Google Next about 1 month ago today, actually, showcasing on stage with Google Cloud and with Qualcomm, the ability to run LLMs on device. So this is being able to regenerative AI not just in the cloud, that's an option as well. But we can run it all the way down the edge on our devices. And we have a great number of slots to do that on because we have #1 market share position, obviously, in Android mobile computing within retail and within the enterprise overall. And what we did to sort of drive a pilot around this is we worked with a European retailer, where we ingested 150 of their store operating procedure documents. So imagine these are everything from how do I deal with returns to HR policies and so on. We took all of those policies and procedures. We put them through what's called a RAG model. This is a retrieval augmentation generation. So it allows us to take an open source large language model like a Llama or a Mistral and then augment that open source model with customer-specific data, in this case, the 150 SOPs. So I'll just, real quick, run through a demo what this looks like. This is going to be a video that plays on the right. So I might be a store associate in this example and I say, "Hey, what are the steps to process a customer return?" He could be new on the job. Maybe it's a category. I'm just not even sure how to return this particular category. That will go to the LLM and then this answer will come back, it gives a very short answer there. And then you click the longer answer and says, "Hey, this is what you do. Is it an in-store return? Was it an online purchase? Here are the different types of refund methods and the exchange options." But the really cool thing about this that makes it enterprise-centric is you can actually explore sources. So in this example, you had explored sources, it took you to the store operating procedure document from which the answer was actually generated. So if you've heard of hallucinations like in a consumer context, this grounds the answer in attribution directly back to the SOP document that generated the answer in the first place. So we can do things like not generate an answer if we can't ground it back to the SOP. Well, what if the customer doesn't have a receipt in this case? Well, it gives you the short answer, again, gives you the longer answer that you can offer a store credit. There may be a restocking fee and I can go back and visit the actual section of the SOP document that would tell me how to handle it if I need to. How do I update on-hand, maybe some are not dealing with the customer but just a regular workflow, on-hand quantities for an item? So how do I adjust the inventory position, if I realize it's just not correct? Again, you'll see a short answer here, and then I can go into the step-by-step. Boom. Here are the 8 steps. Open this app, tap on this icon, go to the quantity field, enter it, hit the save icon and you've just updated the on-hand quantity. So think about this as a digital assistant for that frontline worker. But we can also integrate with ours or others workforce management-type tools, employee self-service tools and say things like, well, what's my schedule for next week? I'm logged in as John Smith in this case. I can see my schedule. The circle dates are dates I'm working. The non-circle dates are dates I'm not. I can click on a date and see what the schedule is for that specific date. And maybe I even want to swap a shift. Let's say I've got a personal commitment next week. Who can I swap ships with next Thursday, which we'll see that come up here and it will load a couple of options of people that are available next Thursday based on their schedules. So that would be, in this case, Michael Davis and Olivia White, and I click on that, you see next Thursday, 23rd. There's no circle, right? That person is available because they're working earlier in the week. And in this case, Olivia is working the weekend, which is available during the week. So those would be candidates to go and swap shifts with. If you think about integrating this with Workcloud, it fundamentally transforms the entire user experience, right? Think about going into a portal and then deeper and deeper into menus in order to be able to swap that shift versus just saying, "Who can I swap a shift with next week? Olivia White, great. Please check with Olivia and make it so, and boom, it's done. So lots of opportunity here to leverage asset visibility, the data we already have access to, the Workcloud software suite, generative AI, run that all down on the end device, and I really suggest you go and check that out as well. That will also be back into the right stage right. Nick Wegman, who joined us from the Antuit acquisition, a brilliant product management person will be covering that one. So hopefully, you can see how excited we are to take our core position, the installed base we have to create an AI-powered future, leveraging the interconnected capabilities of asset visibility, connected frontline workers and intelligent automation. So I look forward to everybody's questions at the Q&A. But for right now, I'd like to invite up our Chief Financial Officer, Nathan Winters.

Thank you, Tom. So over the last hour, you've heard how we invest in innovation to deliver our customers with the digitization and automation they need to enhance the outcomes for their customers and their operations. Now I want to wrap this up with how this delivers an attractive return for our shareholders. So let me start with our financial framework because this is really the found of every decision we make as a management team. First, it's imperative that all of our investments drive long-term profitable growth. And we obviously want to have an attractive value proposition to our customers, but that also has to be an attractive value proposition back to us as a company. The second is we want to deliver operating efficiency every day in everything that we do. And we want to ensure that we have disciplined financial management principles as we go through any operating cycle like we have over the last several years. And the third, but whether it's organic or inorganic investment, we would ensure those align with our long-term vision and strategy of the company, so that also we look at the product and solutions they're better together being part of Zebra. Now that strategy translates into our capital allocation priorities, which have remained unchanged for the last several years. First, we want to invest in organic growth, which you've heard about today from our various leaders. We want to ensure that we protect the company and have a debt leverage ratio around 1.5 to 2.5x to not only protect the company, but give us the financial flexibility so we can grow and continue to evolve the portfolio. We want to return capital to shareholders via share repurchases. We've done this over the last several years, and we're looking forward to get back to doing that here in the second half of the year and into 2025. And we're going to continue to look for inorganic investment opportunities to expand the portfolio in our adjacent and expansion markets again, to enhance the overall portfolio of Zebra. So we really think about how do we invest in innovation in 3 pillars. We talked a lot about how we invest in R&D from an organic perspective, how we add capabilities through M&A, but we don't often talk about our venture portfolio. Our portfolio today consists of 13 companies, a book value of just over $100 million. On average, we own about 5% of the companies in the portfolio. This also gives us advisory board seat, which really gives us first-hand insights into these emerging technologies, whether that's location and sensing, vision systems, robotic automation. And it's the combination of these 3 pillars of investment that's built out some of our businesses we have today. Joe White mentioned one of those around machine vision. That started with organic investment, stemming from our scanning business, couple that with the adaptive vision in Matrox business to build the foundation of what we have today. And now we're looking at how we leverage our venture portfolio to get insights into what's the next emerging technologies in that space. Our robotics automation business used all 3 of these pillars. It started with organic investments around a robot for retail. We made a series of venture investments to understand more about the robotics industry. That led to the acquisition of Fetch and then combining those assets allows us to produce the solution that you will see here today that we have in the market. So with this investment framework, we believe that we're well positioned to grow 5% to 7% over a cycle. We did this leading up to and through the pandemic, and the same fundamental drivers that were there then exists today. We talked about the tailwinds for these industry megatrends that both Bill and Tom highlighted, but we have a vibrant core market: $11 billion, grew mid-single digits; strong market share positions as we discussed across mobile computing, data capture and thermal printing, with the service and support packaged around that. Our adjacent markets, $13 billion, growing high single digits. And with the ability to gain market share in each one of those markets, whether it's ruggedized tablets, RFIDs, smart supplies, again, gives us opportunity to accelerate growth for the company. And then a $6 billion market across our expansion portfolio, growing double digits with a strong right to play based on our customer base, the overlapping customer base, our partner ecosystem, and being complementary to our core and adjacent portfolio. And it's really this combination of the attractive markets we serve, our commitment to innovation and the financial discipline that delivers that sustained value creation for the company. So as we grow 5% to 7%, we can also scale profitability. We do this through disciplined price management as well as driving productivity across our supply chain operations and functions, scaling these emerging businesses like machine vision and software, which has an inherently higher gross margin profile than our core business. We also benefit from our variable cost structure that leverages partner network we have, so we can quickly scale up and down depending on the market conditions, as well as growing on top of our fixed cost structure, whether that's our distribution centers, the repair depots that Jenna mentioned or our core operating system that allows us to expand margin rates over time. You combine this with 100% free cash flow conversion, redeploying that capital into the business, and we can deliver double-digit earnings per share growth on an annual basis over the cycle. So let me wrap with a summary of why we believe we're well positioned to not only extend our industry leadership but offer a compelling investment opportunity for all of you. I hope you heard us talk about the strong secular trends, the need to digitize and automate our customers' workflows and environments is only going to continue to accelerate with the challenges they all face. We have a track record of innovation that not only extends our industry leadership but enhances our growth profile in these new expansion businesses. Our partner ecosystem really provides the global reach and scale to a diversified customer base across each one of those vertical markets globally. We have a capital and carbon light business that provides that variable cost structure so we can scale quickly to react to market conditions, again, like we've done over the last several years. And a strong free cash flow and financial flexibility enables us to deliver long-term attractive returns for our shareholders. So thank you. With that, we're going to wrap up with Mike and get set up for a Q&A discussion.

We're going to reserve the next 15 to 20 minutes for Q&A. We're getting everything set up right now. We will have 2 mic runners in the audience. We have Drew and Emma with mics. So we ask that, as we're fielding your questions in the room, that you do announce your name, your firm and your question in the microphone so that those in the webcast can hear you. And with that, I call the presenters back up to the stage.

Keith Housum, Northcoast Research. As you guys are talking about the innovation and working together with some of your larger customers, maybe provide some examples of, as you guys work with some of your customers, what's the real-time products or solutions that have come out of working together? So you -- they're coming to you, you come into them, co-developing your product and how you've been able to take that through the rest of the customer base.

I mean certainly, many of the things that we talked about today. Most of what we do is we don't -- unlike a consumer product, we don't build products in a vacuum. We jointly work with our customers and build products. A product like WorkstationConnect was a good example. I talked about that earlier today. If you were at NRF 4 years ago, possibly 4 years ago, you would have seen us with target demoing that as a first concept. So we jointly innovated that together. That evolved considerably since that time frame. Back then, it was just a simple screen sharing. Today, it's a fully managed desktop operating on one of our mobile computers. And it's being used and deployed broadly across many of our retail customers today. But that would be just one good example of how we've done that.

I think that the -- when I think about it, I think of our team is working closely with our customers across each vertical market and being experts in those vertical markets, right? But so are our customers. But I think our customers describe to us their biggest challenges at times. And the advantage we have is by knowing that market and staying close to them and understanding their environment and then sharing us those challenges. If our team can look ahead beyond -- look at the problem the customer is looking to solve, and look for a solution to that problem. And that solution may come in the idea of a workflow and changing a workflow within their environment. It may come in the form of technology. It may come in the form of future technology, meaning that we see something that's coming in the horizon that a customer hasn't seen yet that we see could fit that environment, whether it's a next-generation mobile device that's smaller in scale that could be a wearable, whether it's an AI model running on a device where our customers say, hey, I don't have the connectivity at my retail stores or my manufacturing facility to leave the environment every time I need to go to a cloud. I need to run the model on the device. So many times, just working closely with them on all the individual examples of the product, many of which come from them describing a problem, us and our teams, understanding that environment of retail transportation, logistics and manufacturing, coming up with a solution ultimately seen beyond what they can see today, then applying technology to that and resources to say, we can solve it. Now it doesn't always work out, meaning that sometimes priorities change, we have a solution and they don't move ahead. So there's a little bit of risk in that, but it's a whole lot less risky than Joe said, about the idea of us developing something in a vacuum. So we really like to have kind of a lighthouse customer, someone we're working with and a lot of voice of the customer before we bring anything to market on a broad scale perspective from our customers.

Keith, just to give you another example, real quick. Device tracker. I mean here's a scenario where we sell mobile computers to many of our large customers, well, they lose them. They get thrown in the trash bin. They get thrown out. And some customers were saying up to 10% of their devices being lost. So we created a device tracker. We help them find and locate their devices and their operation. And this is a win-win for both of us because they're able to instead of spending money on replacing lost devices, they're enabling new use cases with the rest of our portfolio and expanding how we're delivering value to them. That's a great example of that. So...

Tommy Moll from Stephens. Question on R&D, which was mentioned a number of times. Internally, what is the process that you have to ensure that you're allocating those dollars optimally to keep that core portfolio fresh and obviously, you want to drive more and more penetration there and then sprinkle the remaining 1/3 into the faster-growing markets. How much of that decision-making is centralized versus decentralized?

Well, I think do you want me to answer this?