Motorola Solutions, Inc. · NYSE:MSI
Motorola Solutions — Q2 2023 Earnings Presentation
20 slides from Motorola Solutions's earnings presentation, Aug 3, 2023
Slide 1: Earnings Presentation Q2 2023 Results
EARNINGS PRESENTATION Q2 2023 RESULTS | August 3, 2023
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: Q2 2023 Highlights
• Sales of $2.4B, up 12% Y/Y HIGHLIGHTS ○ Products and Systems Integration up 12% Q2 2023 ○ Software and Services up 13% ○ Double-digit growth in all technologies ■ Land Mobile Radio Communications (“LMR”) up 10% ■ Video Security and Access Control (“Video”) up 17% ■ Command Center up 20% • GAAP EPS
Slide 4: Financial Results
FINANCIAL RESULTS Q2 22 Q2 23 CHANGE REVENUE $2,140 $2,403 12% NON-GAAP $497 $641 29% OPERATING EARNINGS* NON-GAAP 23.2% 26.7% 350 bps OPERATING MARGIN* NON-GAAP $2.07 $2.65 28% EARNINGS PER SHARE* ($M) excluding per share amounts * Non-GAAP measures exclude highlighted items, including share-based
Slide 5: Cash Flow
CASH FLOW (M$) Q2 22 Q2 23 CHANGE FY 22 FY 23E CHANGE OPERATING CASH $10 $93 $83 $1,823 $1,900 $77 FLOW CAPITAL ($59) ($53) $6 ($256) ($265) ($9) EXPENDITURES FREE CASH FLOW* ($49) $40 $89 $1,567 $1,635 $68 FY23 Cash Flow includes approx. $300M of higher cash taxes inclusive of a $70M one-time payme
Slide 6: Products & SI
PRODUCTS & SI Q2 2023 • Revenue up 12%, driven by growth in LMR and Video Revenue • Non-GAAP operating margin* up 520 bps driven by ($M) higher sales, lower direct material costs, and improved operating leverage • Notable wins and achievements: • $145M P25 system upgrade for Kern County, CA • $41M P
Slide 7: Software & Services
SOFTWARE & • Revenue up 13%, driven by growth in LMR, Command Center SERVICES and Video Q2 2023 • Non-GAAP operating margin* up 80 bps driven by higher Revenue sales and improved operating leverage, partially offset by ($M) higher expenses from acquisitions • Notable multi-year wins and achievements
Slide 8: Regional Revenue
REGIONAL ($M) Q2 22 Q2 23 CHANGE REVENUE NORTH AMERICA $1,484 $1,641 11% Q2 2023 INTERNATIONAL $656 $762 16% TOTAL $2,140 $2,403 12% ● North America growth driven by LMR, Video and Command Center ● International growth driven by LMR and Video, partially offset by FX
Slide 9: Backlog Trend
BACKLOG TREND Software and Services • Y/Y up $360M primarily driven by growth in multi-year software and services contracts in North America, ($B) partially offset by revenue recognition for Airwave and the backlog reduction related to the exit of ESN $13.4 $14.1 $14.3 • Q/Q up $111M primarily drive
Slide 10: Outlook
OUTLOOK * (NON-GAAP) Q3 2023 Q3 Details • Effective tax rate 23% to 24% Revenue Growth Approx. 6% • Fully diluted share count of approx. Non-GAAP EPS $2.99 - $3.04 172M shares PRIOR FULL-YEAR 2023 Revenue ($M) $9,725 - $9,775 Non-GAAP EPS $11.21 - $11.29 FULL-YEAR 2023 Full-Year Details • Effective
Slide 11: Q&A Participants
Q&A PARTICIPANTS GREG BROWN Chairman and CEO JACK MOLLOY Executive Vice President and COO JASON WINKLER Executive Vice President and CFO MAHESH SAPTHARISHI Executive Vice President and CTO TIM YOCUM Vice President, Investor Relations
Slide 12: 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") included in this presentation, Motorola Solutions, Inc. (the “Company”) also has included non-GAAP measurements of results, including free cash flow, non-GAAP
Slide 13: Supplemental Disaggregation of Revenue
SUPPLEMENTAL DISAGGREGATION OF REVENUE
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)
Slide 15: Supplemental Non-GAAP Measures
SUPPLEMENTAL NON-GAAP MEASURES
Slide 16: Supplemental Non-GAAP Measures
SUPPLEMENTAL NON-GAAP MEASURES
Slide 17: Supplemental Non-GAAP Measures
SUPPLEMENTAL NON-GAAP MEASURES * Free Cash Flow is a non-GAAP financial measure and is calculated as Net cash provided by operating activities - Capital Expenditures.
Slide 18: Reconciliation of GAAP Net Earnings to EBITDA and Adjusted EBITDA
RECONCILIATION OF GAAP NET EARNINGS TO EBITDA AND ADJUSTED EBITDA SUPPLEMENTAL NON-GAAP MEASURES NET DEBT CALCULATION NET DEBT TO ADJUSTED EBITDA CALCULATION *** Refer to slide 14 for details of highlighted items
Slide 19: Reconciliation of GAAP Net Earnings to EBITDA and Adjusted EBITDA
RECONCILIATION OF GAAP NET EARNINGS TO EBITDA AND ADJUSTED EBITDA SUPPLEMENTAL NON-GAAP MEASURES *** Refer to slide 14 for details of highlighted items
Slide 20: Thank You
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