Motorola Solutions, Inc. · NYSE:MSI
Motorola Solutions — Investor Presentation (January 2025)
47 slides from Motorola Solutions's investor presentation, January 2025
Slide 1: Investor Overview
Investor Overview January 2025 ● Investment thesis ● Total addressable market ● Who we serve ● Segments and technologies ● Financials ● Capital allocation
Slide 2: Solving for safer
Solving for safer We build and connect technologies to help protect 37% people, property & places. of 2023 revenue from Software & Services, a proxy for ARR Video Security & LMR Command 17% CAGR Access Control Communications Center Non-GAAP EPS growth since 2015 5M+ 13K 3.6K of 6K fixed video cameras
Slide 3: A technology ecosystem for public safety and enterprise security with $66B TAM
A technology ecosystem for public safety and enterprise security with $66B TAM* Video Security & Access Control LMR Communications Command Center Our video security and access control Our critical communications devices and networks Our command center technologies can bring systems, powered by AI, c
Slide 4: Uniquely positioned for long-term value creation
Uniquely positioned for long-term value creation Strong Competitive Advantage Well-Positioned For Growth ● Purpose-built solutions meet extreme ● Digitization of public safety workflows performance requirements driving demand for our solutions ● Mission-critical ecosystem across video, ● Increased de
Slide 5: Who we serve
Public Safety Who we serve We enable the collaboration between public EMERGENCY POLICE FIRE MEDICAL safety agencies and enterprises for a proactive approach to safety and security. NATIONAL PUBLIC CRITICAL SECURITY SERVICES EDUCATION INFRASTRUCTURE $10.0B ~75% of revenue 2023 Annual Revenue Enterpri
Slide 6: Revenue by Geographic Region
Revenue by Region International Geographic $10.0B* of Revenue $3.0B of Revenue Region 2023 Annual Revenue 69% 31% ● North America ● EMEA/Australia & NZ ● International ● Other * China revenues represent <1% of 2023 Annual Revenue
Slide 7: Segments & Technologies
Segments & Technologies 2023 Annual Revenue Products & Software & Systems Integration Services Segment Segment (primarily recurring) LMR Products LMR Services and Integration Command Center Video Security & LMR Command Video Products Video Software Access Control Communications Center $6.24B $3.74B
Slide 8: Ongoing Portfolio Transformation
Ongoing 2015 2023 Portfolio $5.7B of Revenue $10.0B of Revenue Transformation Nearly half of revenue now video, software and recurring services Total Addressable Market Total Addressable Market ~$13B ~$66B* ● LMR Products and Systems Integration ● Services, Command Center, Video Security & Access Co
Slide 9: Strong backlog driven by multi-year agreements
Strong backlog driven by $13.6 $14.3 $14.3 multi-year agreements $11.3 $11.4 $10.6 ($B) $9.6 Backlog growth $8.4 drivers $6.5 ● Software and Services multi-year agreements ● LMR products ● North America ● Software & Services ● Products & SI
Slide 10: Strong Financial Track Record
Strong +12% Y/Y +10% Y/Y +13% +8% Y/Y +10% Y/Y Financial Y/Y +9% +10% +7% Y/Y Y/Y +14% Y/Y Y/Y (6%) +15% +20% Y/Y Track Record Y/Y Y/Y +14% +6% Y/Y Y/Y +41% +6% Y/Y Y/Y Summary Total Revenue Growth ($B) Software & Services Segment Revenue Growth* ($B) ● Video, software and recurring services driving
Slide 11: Guidance
2024 Guidance +8.25% $13.63 - Nov 7, 2024 $10.0 $11.95 $13.68 FY guidance E ● Revenue growth of 8.25% ● Non-GAAP EPS $13.63 - $13.68 ● $2.3B of Operating Cash Flow E E Total Revenue Growth ($B) Non-GAAP EPS
Slide 12: Capital allocation framework drives shareholder value
Capital allocation framework drives shareholder value Based on operating cash flow Capex Asset light model Share repurchases or acquisitions ~$7.9B* of share repurchases, retiring 23% of share float at average cost of $95.35 Annual Dividend since 2015** Double digit annual ~$6B*** increases since 2015
Slide 13: Accretive Acquisitions
Accretive ~$6B invested since 2015* Acquisitions Video Security & Access Control Command Center LMR Communications Estimated 2024 2018 2015 2016 2016 contribution 2019 2019 2017 ~$3B 2017 Revenue 2020 2020 2018 2020 Mid-single digit** 2019 Growth rate 2021 2021 20+%** 2022 2022 2021 2022 2022 Adj. E
Slide 14: Video Security & Access Control
Video Security & Access Control Our video security and access control systems, powered by AI, can alert you when action is needed, focusing human attention to help cover more ground and act with more certainty.
Slide 15: Video Security & Access Control: Current environment and our approach
Video Security & Access Control Current environment Our approach ● 5M+ fixed cameras across More than just cameras and footage, our video 300k+ installations (1) solutions combine computer vision with AI, helping to recognize what’s important and what’s not. ● Less than 20% of events are detected aft
Slide 16: Video Security & Access Control product overview
Video Security & Access Control Fixed video Access control In-car Body License plate security management video systems cameras analytics Embedded AI locates Video, biometrics, In-car video combines Radios automate 50B+ scans paired with persons or vehicles, weapons detection, with body-worn and came
Slide 17: Fixed video and access control portfolio
Mobile Video Fixed video and Fixed Video 2023 Video Revenue access control portfolio On-premise Cloud-based Criteria Scalability | Feature rich User experience | Simplicity | Small IT footprint Hardware Fixed + video Formerly Pelco, Videotec, Calipsa Analytics Hardware Formerly Formerly Avigilon, In
Slide 18: Mobile video portfolio
Fixed Video Mobile video portfolio Mobile Video 2023 Video Revenue Government Enterprise Body cameras In-car video License plate recognition solutions
Slide 19: ~50% of video sales in government & public safety, education and healthcare
~50% of video sales in government & public safety, education and healthcare Gov’t & Public Safety Additional Verticals ● Financial Services ● Manufacturing $1.7 Billion 2023 ● Entertainment Video Revenue ● Transportation ● Retail ● Utilities Education ● Hospitality Healthcare
Slide 20: Growth & Monetization
Growth & Monetization Video Security & Access Control Rapidly gaining share in video security ● $1.7B+ in sales growing double digits in $26B TAM ● 5M+ fixed video cameras deployed across 300K+ sites ● 90% of our fixed video camera portfolio has embedded AI capabilities ● Broad on-prem and cloud fixed
Slide 21: Land Mobile Radio Communications
Land Mobile Radio Communications Our critical communications devices and networks are designed for the harshest conditions, helping you stay connected and communicate with clarity when it matters most - from everyday routines to a crisis unfolding.
Slide 22: LMR Communications: Current environment and our approach
LMR Communications Current environment Our approach ● When disaster strikes, cellular networks fail or Secure and resilient communications unify voice get overloaded - Hurricane Ian, Maui wildfires and multimedia collaboration for critical events ● 13K+ LMR networks globally, 50+ nationwide & statewi
Slide 23: LMR Communications public safety and enterprise offerings
LMR Communications Public safety Enterprise Broadband LMR software & Public safety communications communications enabled solutions services cloud core Highly survivable Secure, encrypted Broadband solutions 4M users under managed Streamlining radio networks, total control of networks protect sensiti
Slide 24: LMR Portfolio
LMR Portfolio Majority of LMR revenue driven by $7.5B 2023 Revenue recurring services and multi-year public safety device refresh cycles Public Safety Devices Services ● Multi-year refresh cycles across S&S ● Critical networks with expanded thousands of customers Segment scope and new value-added se
Slide 25: Growth & Monetization
Growth & Monetization LMR Communications A global leader in critical communications ● Platform business growing by mid-single digits ● 13k+ LMR networks globally, 50+ nationwide & statewide systems ● Networks monetized with recurring services and devices replaced every 6-8 years f ● Multi-year servi
Slide 26: Command Center
Command Center Our command center technologies can bring voice, video and data into a single view to help simplify workflows and provide the overarching perspective to make decisions with greater focus, accuracy and speed.
Slide 27: Command Center: Current environment and our approach
Command Center Current environment Our approach ● Over 60% of PSAPS rely on our call handling Native cloud, hybrid and on-prem software software solutions that support the complex process of the public safety workflow from "911 call to case ● 10k more lives could be saved each year if 911 closure" co
Slide 28: Command Center: Detection, Response, Resolution
Command Center Detection Response Resolution Community tipping, mass notification, panic Dispatch & coordination, real-time intelligence & Centralized records, evidence buttons and 911 call handling & routing collaboration and field reporting management and investigative tools Helping public safety ag
Slide 29: Growth & Monetization
Growth & Monetization Command Center End-to-end platform offered in the cloud and on-prem ● Large software install base of 3,600 911 centers in the U.S. creates significant expansion opportunity ● ~60% of our Command Center customers have one or more of our cloud solutions ● Sales of over $700M growi
Slide 30: Solving with AI
Solving with AI Taking a proactive and responsible approach to enabling the use of AI and generative AI in our solutions and within our teams Human-Centered Application in 3 Areas Automate the mundane Accelerate analysis Protect privacy Human attention Human action Human judgement Detect key events
Slide 31: Competitive Landscape
Competitive Video Security & Access Control LMR Communications Command Center Landscape Video Security Access Control * This competitive landscape slide includes a non-exhaustive list of some key competitors in each technology MSI operates.
Slide 32: Additional Financials
Additional Financials
Slide 33: Strong Balance Sheet
Strong Balance Sheet* ● Investment grade ● Total Liquidity of ~$3.7B ○ Undrawn revolving credit facility $2.25B ○ Cash & equivalents $1.4B ● Net Debt to Adj. EBITDA ratio of ~1.4X ● Balanced debt maturity ● U.S. Pension is ~85% funded ○ Do not expect any funding requirements for the next several yea
Slide 34: Debt Maturity Profile
Debt Maturity Profile ($M) Investment Average maturity > 8yr grade rating Average coupon < 4.5% ● Moody’s - Baa2, stable All fixed-rate notes ● S&P - BBB, stable ● Fitch - BBB, stable * As of September 28, 2024
Slide 35: ESG
ESG
Slide 36: We are committed to corporate responsibility
We are committed to corporate responsibility 2023 2023 World's Top Companies America’s Climate for Women Leaders Philanthropy Environment Donated $100M+ by the Committed to our goal of Motorola Solutions Foundation reducing our Scope 1 and 2 in the past 10 years emissions by 95% by 2031 2023 2023 Wo
Slide 37: Our impact
Our impact Our technologies can directly support some of the world’s largest societal challenges every day. Safer schools Natural disasters Community-policing relationships More than 370,000 students have been exposed to gun U.S. natural disasters have cost $2.655 trillion since 1980 Only 43% of U.S
Slide 38: Appendix
Appendix
Slide 39: 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 40: Use of non-GAAP measures
Use of non-GAAP measures In addition to the results presented in accordance with accounting principles generally accepted in the U.S. (“GAAP”) in this presentation, Motorola Solutions, Inc. (“Motorola Solutions” or the “Company”) has provided certain non-GAAP measurements. Motorola Solutions has pro
Slide 41: Use of non-GAAP measures
Use of non-GAAP measures Adjusted Free Cash Flow - Represents Free Cash Flow excluding a $500 million voluntary, debt-funded U.S. pension contribution in the first quarter 2018. The Company has excluded the impact of this contribution because the Company believes that this item does not reflect expect
Slide 42: Solving for safer
Solving for safer communities schools hospitals businesses everywhere MOTOROLA, MOTO, MOTOROLA SOLUTIONS and the Stylized M Logo are trademarks or registered trademarks of Motorola Trademark Holdings, LLC and are used under license. All other trademarks are the property of their respective owners. ©
Slide 43: Appendix: Supplemental Non-GAAP Measures
Appendix: Supplemental Non-GAAP Measures * Amounts attributable to Motorola Solutions, Inc. common shareholders. ** Under U.S. GAAP, the accounting for a net loss from continuing operations results in the presentation of dilutive earnings per share equal to basic earnings per share, as any increase
Slide 44: Appendix: Supplemental Non-GAAP Measures
Appendix: Supplemental Non-GAAP Measures Reconciliation of GAAP net earnings to EBITDA, adjusted EBITDA and adjusted EBITDA margin *** Refer to slide 43 for details of highlighted items
Slide 45: Appendix: Supplemental Non-GAAP Measures
Appendix: Supplemental Non-GAAP Measures Reconciliation of GAAP operating cash flow to adjusted operating cash flow Reconciliation of GAAP operating cash flow to adjusted free cash flow
Slide 46: Appendix: Supplemental Non-GAAP Measures
Appendix: Supplemental Non-GAAP Measures Reconciliation Of GAAP Net Earnings To EBITDA and Adjusted EBITDA Net Debt to Net Debt Calculation Adjusted EBITDA Calculation *** Refer to slide 43 for details of highlighted items
Slide 47: Our impact: references
Our impact References for slide 37 ● Safer Schools: ○ Gun violence in schools, April 12, 2024: https://www.washingtonpost.com/education/interactive/school-shootings-database/ ○ Federal funding 2023: https://cops.usdoj.gov/svpp (refer to Funding link) ● Natural Disasters: ○ Weather: https://www.ncdc.
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