Motorola Solutions, Inc. · NYSE:MSI
Motorola Solutions — Q3 2020 Earnings Presentation
15 slides from Motorola Solutions's earnings presentation, Oct 29, 2020
Slide 1: Earnings Presentation Q3 2020 Results
EARNINGS PRESENTATION Q3 2020 RESULTS | OCTOBER 29, 2020
Slide 2: Safe Harbor
SAFE HARBOR A number of forward-looking statements will be made during this presentation. Forward-looking statements are any statements that are not historical facts. These forward-looking statements are based on the current expectations of Motorola Solutions, and we can give no assurance that any f
Slide 3: Highlights | Q3 2020
HIGHLIGHTS | Q3 2020 • Sales of $1.9B, down 6% vs the prior year • Software and Services up 9% on growth in both services and software • Products and Systems Integration down 14%, on declines in public safety LMR and Professional & Commercial Radio (“PCR”), partially offset by growth in video securi
Slide 4: Financial Results
FINANCIAL RESULTS Q3 19 Q3 20 CHANGE Revenue $1,994 $1,868 (6%) Non-GAAP $509 $463 (9%) Operating Earnings* Non-GAAP 25.5% 24.8% (70 bps) Operating Margin* Non-GAAP $2.04 $1.95 (4%) Earnings Per Share* ($M) excluding per share amounts * Non-GAAP, excluding highlighted items, stock-based compensation
Slide 5: Cash Flow
CASH FLOW ($M) TRAILING TWELVE MONTHS Q3 19 Q3 20 CHANGE Operating Cash Flow $1,840 $1,704 ($136) Capital Expenditures ($258) ($210) $48 Free Cash Flow* $1,582 $1,494 ($88) *Free Cash Flow is defined as Operating Cash Flow less Capital Expenditures.
Slide 6: Products & SI | Q3
PRODUCTS & SI | Q3 • Revenue down 14% driven by public safety LMR and Revenue Professional and Commercial Radio, partially offset by ($M) $1,349 growth in video security $1,163 • Non-GAAP Operating margin* down 330 bps primarily due to lower sales 2019 2020 • Notable wins and achievements: Non-GAAP
Slide 7: Software & Services | Q3
SOFTWARE & SERVICES | Q3 • Revenue up 9%, driven by growth in both services and Revenue software ($M) $705 • Non-GAAP Operating margin* up 220 bps driven by $645 higher sales and gross margins and improved operating leverage • Notable wins and achievements: 2019 2020 • $120M+ next generation 911 mul
Slide 8: Regional Revenue
REGIONAL REVENUE • North America down in public safety LMR ($M) Q3 19 Q3 20 Change and Professional and Commercial Radio partially offset by growth in Services, video security and software NORTH AMERICA $1,344 $1,268 (6%) • International down in Professional and INTERNATIONAL $650 $600 (8%) Commerci
Slide 9: Backlog Trend
BACKLOG TREND Software and Services ($B) • Y/Y down $44M driven by revenue recognition for Airwave $11.0 and ESN, partially offset by an increase in multi-year $10.5 $10.7 agreements in North America and $74M of favorable FX $7.8 $7.8 $7.7 • Q/Q up $138M driven by an increase in multi-year agreement
Slide 10: Outlook (Non-GAAP)
OUTLOOK (NON-GAAP)* Q4 2020 Q4 Details Revenue Decline (6%) to (5.5%) • Effective tax rate of 23% to 24% Non-GAAP EPS $2.71 - $2.76 • Fully diluted share count approx. 175M PRIOR FULL-YEAR OUTLOOK AUG 6 Revenue Decline approx. (7%) Non-GAAP EPS $7.40 - $7.52 UPDATED FULL-YEAR 2020 Revenue Decline ap
Slide 11: Q&A Participants
Q&A PARTICIPANTS GREG BROWN Chairman and CEO JACK MOLLOY Executive Vice President, Products & Sales JASON WINKLER Executive Vice President and CFO KELLY MARK Executive Vice President, Software & Services TIM YOCUM Vice President, Investor Relations
Slide 12: Use of Non-GAAP Measures
USE OF NON-GAAP MEASURES In addition to the GAAP results provided during this event, Motorola Solutions has provided certain non-GAAP measurements. Motorola Solutions has provided these non-GAAP measurements as a measure to help investors better understand its core operating performance, enhance com
Slide 13: Use of Non-GAAP Measures
USE OF NON-GAAP MEASURES “Free Cash Flow” is a non-GAAP measure and should not be considered a replacement for results in accordance with accounting principles generally accepted in the U.S. (“GAAP”). This non-GAAP measure may not be comparable to similarly-titled measures reported by other companie
Slide 14: Supplemental Non-GAAP Measures
SUPPLEMENTAL NON-GAAP MEASURES Motorola Solutions, Inc. and Subsidiaries Non-GAAP Trend (In millions, except for per share amounts) Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4 '19 Q1'20 Q2'20 Q3'20 Net sales $ 1,468 $ 1,760 $ 1,862 $ 2,254 $ 1,657 $ 1,860 $ 1,994 $ 2,377 $ 1,655 $ 1,618 $ 1,868 GAA
Slide 15: Thank You
THANK YOU