Good day, and welcome to the Third Quarter 2023 Zebra Technologies Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. I would now like to turn the conference over to Mike Steele, Vice President, Investor Relations. Please go ahead. Good morning, and welcome to Zebra's Third Quarter Conference Call. This presentation is being simulcast on our website at investors.zebra.com, and will be archived there for at least one year. Our forward-looking statements are based on current expectations and assumptions and are subject to risks and uncertainties. Actual results could differ materially, and we refer you to the factors discussed in our SEC filings. During this call, we will reference non-GAAP financial measures as we describe our business performance. You can find reconciliations at the end of this slide presentation and in today's earnings press release. Throughout this presentation, unless otherwise indicated, our references to sales performance are year-over-year on a constant currency basis and exclude results from recently acquired businesses for the 12 months following each acquisition. This presentation will include prepared remarks from Bill Burns, our Chief Executive Officer, and Nathan Winters, our Chief Financial Officer. Bill will begin with our third quarter results and actions we are taking. Nathan will then provide additional detail on the financials and discuss our Q4 outlook. Bill will conclude with progress we are making on advancing our Enterprise Asset Intelligence vision. Following the prepared remarks, Joe Heel, our Chief Revenue Officer, will join us as we take your questions. Now let's turn to slide four as I hand it over to Bill. Thank you, Mike. Good morning, and thank you for joining us. As expected, our third quarter performance was impacted by broad-based softness across our end markets and elongated sales cycles. This resulted in a significant decline in sales, with expense deleveraging impacting profitability. We will spend time today discussing our results and the demand environment, as well as the progress we have made to rationalize our cost structure and shift our go-to-market resources to drive sales growth and improve profitability as our end markets recover. For the quarter, we realized sales of $956 million, a 30% decline from the prior year, an adjusted EBITDA margin of 11.6%, a 950 basis point decrease, and non-GAAP diluted earnings per share of $0.87, a 79% decrease from the prior year. We saw broad-based softening of demand in late Q2, which continued throughout Q3 as customers demonstrated more cautious spending behavior across all our end markets and regions. These dynamics have been exacerbated by our distributors reducing their inventory levels, which accounted for about 1/3 of our Q3 sales decline. As a reminder, our distribution channel has been aggressively driving down inventory as end user demand has slowed, product lead times have recovered, and cost of holding working capital has increased. We believe this reset will largely complete by year-end. Although we experienced declines across all product categories, services and software were bright spots in the quarter. As we enter Q4, with essentially all the cost restructuring actions now implemented, we expect to see a significant sequential improvement in profitability. These actions are now expected to yield net annualized cost savings of $100 million, which is an increase from our previous expectation of $85 million. On slide 5, we summarize drivers of demand trends across our end markets. Our three largest end markets, representing more than three-quarters of our sales volume, are indexed to the goods economy, which has been significantly underperforming the services economy. While each of our primary end markets declined, demand was weakest in retail and e-commerce and transportation logistics, as many customers are navigating a challenging environment and absorbing capacity built out during the pandemic. As you see on the slide, despite current demand softness, there are several themes that we expect to drive investment in our solutions over the long term, including labor and resource constraints, real-time supply chain visibility, track and trace mandates, and increased expectations from shoppers and patients. Turning to slide 6, I'd like to review the actions we are taking to address and mitigate the impacts of the soft demand environment and position ourselves for long-term success. In late Q3 and early Q4, we implemented most of the cost restructuring actions that are driving $100 million of net annualized operating savings. We are reallocating resources to accelerate growth in underpenetrated markets, including Japan, along with government and manufacturing sectors, and to capture the potential of new use cases that leverage our solutions to digitize and automate environments, including RFID and Machine Vision. We are also renegotiating long-term supply agreements and working with our contract manufacturers to draw down component inventories. As part of our long-term incentive plan, we added a Free Cash Flow Conversion metric. We expect the cost actions we have implemented and the shift of our go-to-market resources to improve profitability and drive sales growth as our end markets recover. While we believe we are seeing a leveling of demand trends and the peak of distributor destocking activity, we are not seeing signs of a market recovery based on customer behavior. Therefore, we remain cautious in our planning through the remainder of this year and the first half of 2024. We'll continue to take an agile approach to managing through this uncertain environment, and we remain disciplined with respect to our cost structure and cash flow. I will now turn the call over to Nathan to review our Q3 Financial Results and discuss our fourth quarter outlook. Thank you, Bill. Let's start with the P&L on slide 8. In Q3, net sales decreased 30.6% and 29.6%, excluding the impact of FX. Our Asset Intelligence and Tracking segment declined 25.8%, primarily driven by printing. Enterprise Visibility and Mobility segment sales declined 31.4%, with pronounced weakness in mobile computing. On a positive note, we drove growth across service and software with strong attach and renewal rates. We saw double-digit sales declines across our regions. In North America, sales decreased 25%. EMEA sales declined 39%, with broad-based declines across the region. Asia Pacific sales decreased 32%, driven by China and Southeast Asia, and Latin America sales decreased 15%, driven by Mexico. Adjusted gross margin decreased 100 basis points to 44.8%, primarily due to expense deleveraging from lower sales volumes, partially offset by favorable premium supply chain costs. As these supply chain costs have been fully mitigated, we are no longer including a slide as part of our earnings presentation. Adjusted operating expenses delevered 910 basis points as a percent of sales. Note that the bulk of the previously announced restructuring plans to drive operating expense savings were implemented in late Q3 and early Q4. Third quarter Adjusted EBITDA margin was 11.6%, a 950 basis points decrease driven by expense deleveraging. Non-GAAP diluted earnings per share was $0.87, a 79% year-over-year decrease. Increased interest expense contributed to the decline, offset by a lower tax rate. Turning now to the balance sheet and cash flow on slide nine. For the first nine months of 2023, negative free cash flow of $193 million was unfavorable to the prior year period, primarily due to lower earnings, including the impact of restructuring actions and higher interest costs, greater use of net working capital due to higher cash taxes and payments for inventory, and $45 million more of previously announced quarterly settlement payments, all of which was partially offset by lower incentive compensation payments. We ended the quarter at a 2.2x net debt to adjusted EBITDA leverage ratio, which is below the top end of our target range of 2.5x, and had approximately $1 billion of capacity on a revolving credit facility, providing ample flexibility as we navigate a challenging environment. Let's now turn to our outlook. As we enter the fourth quarter, we are seeing sales velocity out of the channel stabilize on a sequential basis and destocking activity moderate as expected. Our Q4 sales are expected to decline between 32% and 36% compared to the prior year. This outlook assumes double-digit declines across our major product categories, with distributor destocking accounting for approximately one-fifth of the sales decline. We are in Q4 with the necessary backlog and pipeline to support our guide. That said, we are not seeing compelling signs of a market recovery as we look to the first half of 2024. We anticipate Q4 Adjusted EBITDA margin to be approximately 16%, driven by expense deleveraging from lower sales volumes, partially mitigated by the benefits of our cost restructuring actions. Despite anticipated expense deleveraging, we expect year-on-year gross margin improvement as we cycle $25 million of premium supply chain costs in the prior year period. Non-GAAP diluted EPS is expected to be in the range of $1.40-$1.80. Our Q4 outlook translates to an expected full-year sales decline of approximately 21% at the midpoint, which is 50 basis points favorable to our prior guide, and an EBITDA margin of approximately 18%. We expect our free cash flow to be positive for the second half of 2023 and negative for the full year. We continue to be focused on right-sizing inventory on our balance sheet and in driving 100% cash conversion over a cycle. Please reference additional modeling assumptions shown on slide 10. With that, I will turn the call to Bill to discuss how we are advancing our Enterprise Asset Intelligence vision. Thank you, Nathan. While sales are pressured near term, our solutions remain essential to our customers' operations, and we are well positioned to benefit from the secular trends that digitize and automate workflows. We are focused on advancing our Enterprise Asset Intelligence vision by elevating Zebra as a premier solutions provider through our compelling portfolio. By transforming workflows with our proven solutions, Zebra's customers can effectively address their complex operational challenges, including scarcity of labor and the need to improve productivity. We empower the workforce to execute tasks more effectively by navigating constant change in near real time.... utilizing insights driven by advanced software capabilities, such as artificial intelligence, machine learning, and Prescriptive Analytics. We continue to advance and innovate our offerings. This includes several product and solution launches across our portfolio, including our Zebra Pay solution, which equips retail associates, hospitality workers, and logistics employees with a mobile point-of-sale device that accepts a variety of payment options almost anywhere. At our annual software customer user conference, we unveiled our Zebra Workcloud Suite of software solutions, which address four critical enterprise functions: workforce optimization, enterprise collaboration, inventory optimization, and demand intelligence. The user experience is tailored to customer-specific business priorities and integrated into a single application. This unique software suite, coupled with our mobile computing platform, differentiates us and expands our market penetration opportunity. In collaboration with Qualcomm, we demonstrated a Generative AI large language model for handheld mobile computers and tablets without requiring connectivity to the cloud. It is a competitive differentiator, which will enable Zebra partners and customers to create new ways of working by further empowering the frontline worker and driving additional productivity gains. We are confident that the innovation roadmap across our business will continue to elevate our customer value proposition. As you can see on slide 13, customers leverage our technology to optimize workflows for the on-demand economy. Our solutions empower enterprises to increase collaboration and productivity and better serve customers, shoppers, and patients. I would like to highlight some recent wins by our team. A global technology provider recently selected Zebra's Machine Vision solution to automate a previously manual inspection process for the manufacturing of engraved component parts. Our solution ensures high quality and traceability, reducing expensive material waste and false errors. We look forward to exploring opportunities to expand our relationship with this customer. A large healthcare system in Europe is using our mobile computers, printers, and RFID solutions to enable real-time tracking of medical equipment, significantly reducing the time caregivers spend searching for critical assets throughout the hospital. A large retail pharmacy chain selected Zebra Workcloud Task Management software to improve store productivity and effectiveness by streamlining communication and accelerating on-site inspections and marketing promotion updates. Optimizing task assignments and store walks drives accountability and frees up staff to focus on customer-facing activities. A large North American retailer refreshed our mobile computers across their stores and added RFID technology to improve inventory accuracy, supply chain efficiency, and customer satisfaction through more frequent cycle counts. During the competitive review, Zebra demonstrated the most cost-effective solution for their needs. Lastly, a large Asian retailer decided to add Zebra's Communication & Collaboration software to their Zebra mobile computers. This subscription-based solution drives store-associated connectivity benefits while displacing a legacy phone system. In closing, our long-term conviction in our business remains unchanged. While customer spend is pressured near term, over the long term, we believe we are well positioned to benefit from secular trends to digitize and automate workflows. We'll continue to elevate our position with customers through our innovative portfolio of solutions while executing on actions to position us well for profitable growth as our end markets recover. I will now hand it back to Mike. Thanks, Bill. We'll now open the call to Q&A. We ask that you limit yourself to one question and one follow-up so that we can get to as many of you as possible. We will now begin the question-and-answer session. To ask a question, you may press star, then one on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw the question, please press star, then two, if needed. At this time, we will pause momentarily to assemble our roster. Our first question comes from Brad Hewitt, from Wolfe Research. Brad, please go ahead. Hi. Thanks. Good morning, everyone. Good morning, Brad. So I was wondering if you guys would be able to provide some preliminary thoughts on the overall growth set up for 2024, and how we should think about that relative to the 5%-7% long-term growth algorithm. You talked about the first half kind of being a little bit more challenging, and then, of course, comps even in the second half, but any thoughts on the growth outlook for 2024, preliminarily, would be helpful. Yeah, thanks, Brad. I guess I'd start with, you know, what we're seeing today. And in, you know, from a Q3 perspective, you know, we finished at the high end of our outlook in a challenging, you know, demand environment. And as we said, we're seeing leveling of, you know, demand trends overall, and really in Q3, the peak of distributor destocking. But we're not yet seeing signs of, you know, market recovery based on, you know, our customers' behavior. So. You know, we saw really all region verticals declined in Q3 and along with customers of all sizes, but it was, you know, most pronounced in large enterprises. There were some bright spots in the quarter, services and software, you know, are examples of that. I'd say is, you know, we're certainly not guiding to 2024 at this time, but, you know, with not seeing really compelling recovery yet, and the idea that, you know, we're going to remain cautious, you know, for the remainder of the year. And really, as we look into the first half of 2024, we're seeing, you know, we have very challenging compares ahead of us. So I'd say that, you know, for the moment, still challenging demand environment, that we would see that, you know, in 2024, and the remainder of the year, we're gonna, you know, remain, you know, cautious. Okay, that's helpful. And then maybe if you could talk about what you saw in Q3 from a bookings perspective and how bookings looked sequentially, as well as what you expect bookings to look like in Q4. I would say that, you know, again, with demand, you know, challenging from that perspective, you know, bookings were as we expected going into, you know, during Q3 and then as we enter, you know, Q4, we've got the, you know, bookings trajectory to, you know, feel good about our guide for, you know, Q4 overall. But again, not seeing, you know, quite signs of recovery yet, but, you know, feel that we've got the order velocity to, to be able to, you know, deliver on our guide for, for Q4. Our next question comes from Tommy Moll, from Stephens. Tommy, please go ahead. Good morning, and thank you for taking my questions. Morning. Morning, Tommy. I think I heard in your prepared comments, you described the velocity on the sell-through as having stabilized, and I wanted to circle back to that topic. One, just to make sure that that's correct. And, and two, if you think about that sell-through velocity, at some point, and maybe you could tell us when that is, when would you expect an acceleration there, just given that you'll have some product refresh cycles where a lot of your installed base is approaching end of useful life, and it's less of a discretionary spend on the part of the customer? Yeah, I think, Tommy, we've used the word, you know, leveling, as we've seen, you know, those demand trends, level out in Q3, and we're seeing that kinda into Q4. And we're seeing that, you know, from a destocking perspective, you know, the biggest impact has been Q3, and again, less so in Q4, and we believe that'll be behind us by year-end. And again, while we're not guiding to 2024, maybe a little more color to add to what I said on the first question. We don't see compelling signs of recovery yet, right? And therefore, you know, our guide for fourth quarter, and then as we look into, you know, first half of 2024, we see, you know, very challenging compares. But that said, you know, we're not seeing customers cancel projects. They continue to, to push them out, and, you know, they can't do that forever. We're seeing, you know, use cases across our products and solutions continue to grow within our customer environment. They will, you know, resume deployments as, as they use the excess capacity across retail and e-commerce, across transportation and logistics, and as our customers around the world see the macro uncertainty abate. So, you know, we've seen this in similar downturns, where typically they last for Zebra quarters, not years. So, you know, as we go through the year, we do see, you know, some progression, and while our visibility for second half 2024, you know, would remain very challenging at the moment, we would be, you know, clearly cycling through easier compares at that time, and really due to the, you know, the restocking that, you know, the destocking, sorry, that we were seeing, you know, in the second half of this year. So I think that's how we'd see it at the moment. And to follow up on the destocking theme, it sounds like you expect most of that to be behind you by the end of the year. And my question is just relating to the visibility there. If 60 days on hand is typical, so, or something in that zip code, for your channel, broadly speaking, do you have any idea where you sit today? And is there a view that that will remain the quote-unquote normal level, or could there be some period of time where we end up below that, just given conservatism among your channel partners at this point? Thanks. Hey, Tommy, this is Nathan. Now, as we said, from a global channel inventory, which again, we measure on days on hand, and as you said, the average is around 60 days, two months, but that varies. You know, you can see quite a bit of variation based on the product type and by region. So again, it's not, it's not consistent globally. And as we said, we ended in the end of Q3 better than we did in Q2, so the days on hand and the relative inventory balances decreased throughout the quarter. I'd say still slightly higher than the normal range, despite those decreases, and that's why we expect distributors will continue to lower their inventory here throughout the fourth quarter. But we do expect to exit the fourth quarter within our normal operating levels. And that's something we work with, you know, very closely with our distributors on in terms of where are they trying to get to, what products do they need to support the markets? And so again, as we, as we enter next year, we expect, you know, kind of the destocking to be at and where it needs to be as we move forward into the year. We move to a question from Damian Karas from UBS. Damian, please go ahead. Hi, good morning, everyone. Morning, Damian. Morning. So not to beat a dead horse here on the demand environment and recovery, but Bill mentioned not seeing, you know, signs of that, as you think about early 2024, I guess that you're seeing that based on your order patterns. But based on your customer conversations, I mean, what do you think it's going to take to see that inflection of demand to drive that? And where would you see it first? You know, thinking about the various markets you play in and your diverse set of customers. Yeah, what I'd say is that, you know, overall, we'd have to see, you know, strengthening certainly of the goods-based economy. And, you know, our customers overall will, you know, resume deployments, as they, you know, some of the macroeconomic uncertainty around the goods-based economy abates. And in T&L and e-commerce, we've seen, you know, significant capacity built out during the pandemic, and that excess capacity has to be used, you know, within their environments. And that's across their entire, you know, environment where we've built that capacity that now, you know, is more being used and demand is more normalized levels than the accelerated levels through the pandemic. I would say overall, you know, when we see the broader demand across the industry, you know, we're seeing that, you know, likely large customers first is what we'd expect. That large customers are the first area where we saw it challenging from a demand environment, so we'd expect that to return first, and then from there, midsize and run rate would follow. I don't know, Joe, if you want to add anything on that. Yeah, maybe just a little bit on that point. During the supply constraint phase, we had given some priority to some of our larger customers. So that's where a large amount of the volume and the capacity that went into the market went, and that's where we're seeing the steepest declines at this point. So I would expect that that's also where we would see the first signs of recovery, where those customers would begin purchasing again. And we are staying very close to those large customers, as we're seeing them sweat their assets longer. We know exactly when they are reaching those points in the product life cycle, where they will need to refresh, and we're working with them on plans that will fit their budgets. You can imagine, as we're going into 2024, they're coming up with new budgets, and we're working with them on doing that. That's perhaps where I would look first. Got it. That's really helpful. And then maybe if we could switch gears and talk about gross margins. Curious how you are thinking about what those look like from here. Is there a further downside from the third quarter, just based on the volume levels you're seeing? And how should we think about the kind of new baseline or normalized gross margin? Yeah, Damian, so if you look, you know, just maybe for context on Q3 gross margin, obviously down year-on-year by about a point to 44.8%. Volume deleveraging was a major driver of the decline, as we had some favorability in premium supply chain costs, now that those are, you know, entirely mitigated. So that was a two-point favorable impact. As well as we're seeing nice traction from the pricing actions we've taken over the last several years and continued to strengthen our service and software margins. So if we look at our underlying gross margins, with the pricing actions we've taken to offset, component cost increases, inflation, with the freight costs declining, really now the focus is on rebalancing our manufacturing and distribution capacity to the lower volume so that we can, again, start to see those margins recover, as we go into next year. So I think the, you know, as we look here at the second half, is the low water mark, just given, the sharp volume declines and making sure we reset capacity, to that, while giving us flexibility to grow as the market recovers. We now have a question from Keith Housum from Northcoast Research. Keith, please go ahead. Thank you. Good morning, guys. If we could perhaps focus a little bit on Zebra's own inventory levels, which obviously are still high compared to historical levels. Is this more component costs, co-component parts, or is it more finished goods? And then, you know, second to that is, do you guys have minimum purchase agreements with your OEMs, where if you're not making the minimum purchases, you're gonna have, you know, penalties you'll incur? Yeah, Keith. So, just on our own inventory, as expected, our inventory balances stayed relatively flat to where we were at the end of the second quarter. We don't expect to see a material change as we exit the year. And as we said before, and as you stated, the primary increase from where we'd expect to be is all around consigned components that are at our tier one manufacturers. So these are, you know, inventory that we made purchase commitments on going back to a year and a half ago, at really the peak demand, as well as the peak supply chain challenges and issues where the lead times were out, you know, greater than a year. So really absorbing those inbound components as our demands decrease. I think that the team's done a phenomenal job working with, working with all of our partners, to reduce, those purchase commitments. If you looked at our outstanding convert- purchase commitments, we've cut those in half, since the beginning of the year. We've driven down finished good balance, since the beginning of the year. So we're making traction, although you don't see it in, in the headline numbers. So really now it's around getting stability in the demand signal, to our suppliers so that we can right-size those inbound components. If you, to your last question, we don't have a minimum purchase agreement that it has penalties. Obviously, we work with our, our tier one manufacturers to, you know, have different tiering in terms of volume on our, on our purchase price, give, you know, to cover their overhead. But there's not, I'd say, a penalty per se at certain volumes. It's just making sure that they have the right capacity within their cost structure. Okay. If I can follow up on that, then as we look forward to, like, 2024, is there a rule of thumb or where we think your inventory levels should be under an optimal level? Because, of course, we'd assume that you'll have some positive free cash flow next year as that gets worked out. Yeah. So I would say, you know, if you look at basically, if you go back to our historical terms and you account for, you know, some of the M&A over the past couple of years, we said that, you know, about $200 million reduction would get us back to, I'd say, normalized levels. You know, when and how quickly we can achieve that is the question. And some of that depends on, again, some of the demand stability as we go into next year. But, you know, that $200 million reduction would be entirely in consigned inventory components at our manufacturers. We'll take a question now from Joe Giordano, from TD Cowen. Joe, please go ahead. Hey, good morning, guys. Morning, Joe. Hey, so I'll ask a couple higher, bigger picture kind of questions. We've dug into the near-term dynamics quite a bit here. You know, I've had a lot of questions about, like, longer term, what is a, a shift from potentially into kind of fixed automation mean for you guys? You know, so you have huge share in mobile computers, and then what happens as you get more and more of these kind of big RFID type, you know, fixed mounted scanners instead of having a person make scans? Like, what does that mean for you over time, if the percentage of scans being done by humans goes down? Yeah, I would say that, you know, the investments we're making across the portfolio, including, you know, new areas such as RFID and Machine Vision, both, you know, play to exactly that. We see a need for both handheld devices, handheld scanning, mobile printing, just as we do, you know, fixed tabletop printing and Fixed Industrial Scanning/Machine Vision, as well as RFID readers. So that's why we've got a broad base of across the portfolio. As you know, our customers continue to digitize and automate their environments. Ultimately, there are places where a Fixed Industrial Scanning Machine Vision, you know, imager makes more sense than someone holding, you know, a hands something in their hand or a hand scanner. RFID does very similar type things, but, you know, you marry RFID technology along with, you know, barcode scanning. So we think of Machine Vision and Fixed Industrial Scanning as a close addition to our scanning business, really fixed versus handheld. And we see, you know, RFID portfolio the same way, where we've got handheld RFID readers and fixed RFID readers across the portfolio, just as we have tabletop RFID printers in mobile. So we think that mobility is going to continue to be an important aspect of our business, but fixed is as well, as we're seeing more fixed infrastructure, more automation in our environments, and that's why we're invested in both. And I think that, you know, Machine Vision and RFID both represent attractive markets for us for that very reason. And Joe, this is Joe Heel. I'll add. I think this is also an opportunity for us to add additional value to our customers, specifically because in both areas, the customers will need more than just the hardware solutions that they might buy from us today as a handheld reader, for example. They will need, in particular, software and other accessories. And so if you think about our Machine Vision business, a very important part of that is the software component, which by and large, we don't provide today when it comes to a handheld scanner. But in the Machine Vision environment, we do provide that. So it's a great opportunity for us to create additional value for customers, but also for us at Zebra. So those are very good answer. I just want one more on. We talked about the trends are not yet improving, but some of the true weakness in the destocking is getting away. So as we come out of that, which I assume we do at some point, when I think back to your 2021, 2022, you're doing, you know, $17.5, $18.5 of earnings, how do you categorize those years? So you have. Revenue was obviously very strong, but margins, you know, were maybe somewhat pressured from some of the supply chain and what you guys had to do to deliver. Like, what kind of market, end market dynamics do you think would need to be in place to get earnings back to levels like that? Because my guess is that you don't need revenues to be nearly that high. I think that, you know, overall, we would expect to see continued progression in, in margin, you know, as our markets recover overall. So I would say that, you know, we would expect to get back to, to levels that we've had in the past, and there's no reason why we wouldn't. There's been a lot of challenges in, in moving pieces over the last several years, including, you know, tariffs, supply chain challenges, the, the significant increased demand we saw over the last two years, driven by the pandemic and building out of capacity. But I think that, you know, returning to the profitability levels that we've had, you know, prior, we see that continuing to progress throughout, you know, 2024 as we get back to more normal levels of demand and our customers begin to buy again, and as we continue to be very thoughtful around, you know, our costs, right? So I think we're going to continue to be cautious in spending as we have been. We're taking, you know, $100 million in annual costs out of the business in 2024, and that'll also, you know, add to profitability along with demand returning. So we see, you know, profitability continue to progress, and there's no reason why we can't get back to past levels. That's how we see it. We will take a question now from Meta Marshall, from Morgan Stanley. Meta, please go ahead. Great. Thanks. Maybe a couple questions for me. You know, the healthcare market has been kind of a source of strength over the past couple of years. Just wondering if there's kind of any commentary about that market, it maybe being less consumer goods related than the others. And then maybe the second question, you noted kind of a step up in investments in the manufacturing market. That's already kind of a pretty strong market for you. So I guess, is that kind of a combination of bringing robotics Machine Vision into that market? Or just kind of, what are kind of some of the areas that you think are unexploited there? Thanks. I would say that, you know, healthcare and manufacturing, less declines than the other markets, so less impacted overall, but they are still seeing the same trends at a broader market. I would say overall in healthcare, you know, our has been in the past, our fastest growing vertical market, but our smallest. As you know, healthcare continues to look to improve productivity, you know, enhance patient safety, clearly automating workflows and digitizing, you know, assets within that environment, you know, creates an opportunity for the full breadth of our solutions portfolio across scanning, printing, mobile computing, RFID, all play a role within healthcare. We're also now seeing new opportunities across healthcare in things like tablets for home healthcare or telehealth, all remain opportunities for us. So we're, you know, we like the healthcare market, and we continue to develop very specific, you know, products for the healthcare market overall. I'd say in manufacturing, you know, while we've got a strong base within our manufacturing customers, a lot of that's really tied to more their logistics and distribution network, more so than kind of assembly and on the line. And I think you said it best already, Machine Vision, Robotic Automation for, you know, in the manufacturer environment with goods transport, demand planning for our CPG customers with Antuit, all leverage our, or give us more strength to meet the demands of that marketplace overall. So we've, you know, we've shifted sales resources to focus on manufacturing and continue to look to recruit, you know, more partners in that area. We see that as an area for Zebra, where we're less penetrated than others, primarily because we are in certain product areas, print and, you know, for instance, on the manufacturing floor, but we could do more there in our new solution. So we clearly see manufacturing and healthcare as both opportunities for us to grow moving forward. Thank you. We will take a question from Andrew Buscaglia from BNP Paribas. Andrew, please go ahead. Hey, good morning, guys. Morning, Andrew. Yeah, so, you know, just, you know, I know you don't give guidance for 2024, but you're talking to kind of how you think see things trending into the new year. And I'm wondering if you could talk about, you know, maybe a range of scenarios with distributors starting to restock potentially. I guess, what, you know, what drives the slope of that restocking? Like, in terms of like, is there the psychology of the distributor more aligned with what their end customer is, you know, providing them with the confidence to restock those shelves? I guess what I'm trying to ask is, like, how do you view the cadence of that restocking event if it were to occur next year? Yeah, so I can address some of that, Andrew. Over the course of the last few quarters, we've gotten a lot tighter with our distributors in both understanding and agreeing on the objectives that they have in their business, which have changed, and in particular, the increasing cost of capital has led them to set very aggressive inventory targets for their business, and then using those targets to ensure that we stay in sync as demand has been relatively volatile, right? So as demand has come down, they have adjusted their inventory to match that, and that's what we're calling destocking. So if you now think about that in reverse, what has to occur is that they have to start seeing improvements in sales out, which we, of course, are working very heavily. We generate the majority of our demand with our sales force, working together with our partners. So we're working with them to generate that sales out demand. As soon as they see that tick up again, we're pretty confident that they will follow with the stocking in lockstep, to achieve those DIO or Days of Inventory Outstanding targets that we have now really good visibility to, and a clear understanding with them, as well as incentives in place for them to reach those. So it's really, generating that demand and seeing it. We think the inventory will just follow. Yeah, okay. Very clear. And, you know, your two biggest markets, e-commerce and retail versus transportation and logistics, are you seeing any difference in, you know, the demand trends and dynamics driving those two areas? What, I guess, what is the key difference for you? Is one stronger than the other? Is one, you know, more likely to come back faster than the other? Yeah, I guess, if you could parse that out. Yeah, Andrew, I would say they're tied and coupled pretty tightly together, especially when you consider, you know, e-commerce versus, you know, buy online and pick up in store or, you know, brick-and-mortar retail. So I'd say e-commerce and transportation logistics tied together because of really parcel delivery. And I think in that case, both had built out e-commerce providers and transportation logistics, built out significant network capacity across, you know, everything they did, their networks, their, you know, capacity around logistics and others, to be able to meet the demands during COVID, which now have kind of reset to pre-COVID levels and are going to grow from there. And I think you've seen moderating demand across e-commerce overall. So I think those two are tied together. I think brick-and-mortar retail, you know, think of in-store, I think that's really more tied to the goods economy. So goods versus service-based economy, which is still, you know, relatively challenged. So I'd say e-commerce and transportation logistics tied hand-in-hand, brick-and-mortar retail, a little bit more goods economy focused. I wouldn't see, you know, much difference in those two. The recovery really is going to be driven by using up this excess capacity we talked about, or a recovery from, you know, more positive signs from an economic perspective overall for those markets to come back. Maybe there's one area that you could see a slight additional opportunity on the retail front, and that is, of course, the one area where they don't overlap, which is the store. Retailers have been itching for some time, and we have had this vision that you can significantly improve the productivity of a retail store by having all of the workers in the store connected and collaborating. And they haven't yet realized that vision. That's been part of what's been deferred as they're going through the current phase of pausing and spending and scrutinizing their budgets. But they really do want to do that. I hear that from retailers all the time, that they believe that there is a big productivity improvement to be had there, in particular, because some of their peers have done it, and they have seen those improvements. So that part of spending is still out there, and it, I'm convinced it will come our way, and that will create an additional demand on the part of retailers with stores that transportation companies don't have. Our next question comes from Rob Mason from Baird. Rob, please go ahead. Yes, good morning, all. I wanted to maybe just probe again, your thoughts as we get into 2024, and not to put a stake into the ground at midyear 2024, but I'm just curious, as you think about normal replacement cycles, how would your average age of your installed base look, midyear next year? Would it be at an average level or, you know, below average, above average? Yeah, I'd say that, you know, Rob. You know, we said is, you know, we're not guiding to 2024, as we've talked about before. I would say, again, from a color perspective, that, you know, on average, I guess it would be the same. What we're seeing today is our customers sweating some of their assets longer than they normally would. They can only do that so long. You know, devices get older, they want to, you know, use more applications requiring faster processor speeds, more memory. You know, you see OSes moving forward, so security and others. So there's reasons for them to upgrade those devices over time. Could they sweat them for a certain amount of time? Yes. But then eventually that, you know, kind of comes our way, and, and they go ahead and upgrade. So I would say average life cycle of, you know, demand in second half, nothing changing there. We're working closely with our customers to make sure we understand their refresh cycles. And, you know, I think that while there's very little visibility of the second half year, I think the biggest thing to remember is we're going to cycle. you know, compares that are easier, and then the destocking, you know, moves away. So I think that's, that's positive. But I would say average number of, you know, refreshes out there, average length of the devices in service and today, customer sweating assets. Maybe I'll give you two data points to support that. One is in Q2, the push-outs that we had in Q1 tripled. In Q3, the push-outs were about the same as they were in Q2, which was almost the same as what we had in the entire year of 2020. So you can see that there's a lot of demand being pushed out, and those are all refreshes that should be happening now to maintain the average life of our estate out there. And so t he average life of our estate is likely going up, and at some point, and that's what we said a couple times already, sorry to repeat it, is that, at some point they will have to buy and refresh those devices. Understood. That's good color. Bill, I wanted to go back to one of your earlier comments in the opening remarks. I thought I heard you mention a shift in go-to-market resources, and I was hoping you could put a little more color around that. And maybe just conjointly, you talked about also accelerating growth in some of these under-penetrated markets, and I'm just curious if there's a connection there, and how are those under-penetrated markets performing right now relative to some of your, you know, more traditional markets? Yeah, I would say that, you know, manufacturing is a good example of that. It has been less impacted, still, you know, down significantly, year-on-year, but less than other markets. That is an opportunity we've talked about earlier in the call. I think there's other markets. Japan is an area that we're investing additional resources as well, and we've won, you know, a large postal opportunity there in the largest retailer in Japan most recently, and we're leveraging those wins and larger partners within Japan to doing more business, you know, within Japan. Government's another area that we haven't had a lot of focus on in the past, but there remains, you know, opportunities for us to grow our business within government. I think from a product perspective, we talked a bit about RFID and Machine Vision, you know, as Fixed Industrial Scanning and Machine Vision around inspection, but also RFID around automation and digitizing and automating, you know, customers' environments. Tablets another good example of a area in which is closely adjacent to mobile, you know, computing, and people want larger screen formats at times, and that creates an opportunity for us. So it's both a market perspective as well as a, you know, a technology perspective. And tactically, we're, you know, reallocating resources across regions and areas to address these. We've started that, you know, already in Q3, and we'll continue to do that as we enter 2004. Some are shorter term opportunities, others are longer term opportunities. We think it's important that we continue to be agile, not only in the cost side of things, but also in where we're deploying our resources to see and address the most attractive, you know, growth markets for us and stay close to our current customers, but really shift resources to the places that we see, recovering, you know, the faster or that we're under-penetrated today. That's how we see it. We will now take a question from Brian Drab, from William Blair. Brian, please go ahead. Okay, thanks. Most of my question's been answered, obviously, at this point. Can you just talk about Fetch and some of the other acquisitions that you made in 2021? You know, you spent quite a bit of money in 2021, and the assets kinda averaged, like, 9-10 times sales in terms of purchase price. Is there, Can you just give an update on how, you know, Fetch and Matrox and the other business that you've acquired recently is doing? And is there any risk of impairment as you're looking at that going into your year-end, potentially? You know, I think we can, starting maybe with software, is our the largest segment in some of the, you know, acquisitions we did around Reflexis and Antuit, Prescriptive Analytics. In that area, we continued to focus on the retail associate and really enabling the retail associate through a suite of products and a solutions portfolio around Workcloud, as we've announced at our recent customer user event around software, and that seems to be resonating well with our customers. This idea that taking task management, workforce management, communication, collaboration, demand planning, combining that into a single application, leveraging our mobile devices in the hands of the associates in retail, and it plays into what Joe talked about earlier, this idea for a device for everyone within retail. So we see our software assets being an important part of marrying with our mobile devices within retail and the idea of putting devices in the hands of more retail associates. I would say, you know, Machine Vision, you know, a $100 million+ market to us, attractive, you know, fragmented market overall. The focus there is manufacturing. We've talked about that earlier in the call, but also logistics and the idea of Fixed Industrial Scanning. You know, they continue to both look to ways to automate, to drive productivity, to improve quality across their organizations. I think the challenge to Machine Vision in the short term is the same as others are seeing. Certainly, cyclical weakness in semiconductors, where when we acquired the asset in Machine Vision, we knew Matrox was heavily weighted towards semiconductor, and our objective there is to not only scale that business, but to diversify the offerings outside of semiconductor into new attractive markets. They could include automotive, food and beverage, you know, inside Fixed Industrial Scanning, warehouse and distribution. So all those represent opportunities for us, and we're excited about that market, and our focus there is really diversification, you know, scale and, you know, driving share gains across Machine Vision. I would say Fetch and from a Robotics Automation or warehouse automation perspective, it's the smallest, still nascent, in that area. I would say we're focused in two areas predominantly. First is goods transport, and again, we talked about that playing in line side replenishment, for instance, inside manufacturing, but also just goods transport in general. Think of moving goods from A to B of varying sizes. That's an attractive market for us. The other market is e-commerce. So think of e-commerce picking, cobots and humans working together within an environment where our devices today are being used by those workers to pick orders and adding additional productivity using automation and robotics is an interesting opportunity for us longer term. So it's the smallest of the segments. We don't see any impairment, you know, opportunities there or issues or concerns. We really find these three as attractive long-term growth opportunities for, you know, Zebra overall. And, you know, some are challenged in the short term. As I said, Machine Vision is a good example of that with semiconductors, but with the long-term prospects of the Machine Vision and Fixed Industrial Scanning market remain very attractive to us. Ken Newman from KeyBanc Capital Markets has a question. Ken, please go ahead. I'm sorry. Let's go to Jim Ricchiuti from Needham and Company. Jim, go ahead. For Jim. Most of the questions I had have been addressed, but maybe just one from me. For the incremental $15 million of savings, is that in any one particular area or just a broad deepening across the existing targeted areas? Thank you. Not, not in one particular area, just, you know, broad-based. As we've, you know, worked through the plans throughout the third quarter and the fourth and scrutinized, you know, where we had to backfill certain roles with the retirement plans, as well as just, you know, any open roles that have come along, just again, scrutinizing that spend is really what drove it. So again, I would say fairly broad-based, and in line with the actions that we're driving for the company. This concludes our question and answer session. I would like to turn the conference back over to Mr. Burns for any closing remarks. Please go ahead. Thank you. I'd like to thank our customers, partners, and employees for their support and dedication to our long-term success. Have a good day, everybody. Thank you. Goodbye.