Motorola Solutions, Inc. · NYSE:MSI
Motorola Solutions — Q1 2023 Earnings Presentation
20 slides from Motorola Solutions's earnings presentation, May 4, 2023
Slide 1: Earnings Presentation Q1 2023 Results
EARNINGS PRESENTATION Q1 2023 RESULTS | May 4, 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: Q1 2023 Highlights
HIGHLIGHTS • Sales of $2.2B, up 15% vs. the prior year ○ Products and Systems Integration up 18% Q1 2023 ○ Software and Services up 10% ○ Double-digit growth in all technologies ■ Land Mobile Radio Communications (“LMR”) up 14% ■ Video Security and Access Control (“Video”) up 17% ■ Command Center up
Slide 4: Financial Results
FINANCIAL RESULTS Q1 22 Q1 23 CHANGE REVENUE $1,892 $2,171 15% NON-GAAP $374 $532 42% OPERATING EARNINGS* NON-GAAP 19.8% 24.5% 470 bps OPERATING MARGIN* NON-GAAP $1.70 $2.22 31% EARNINGS PER SHARE* ($M) excluding per share amounts * Non-GAAP measures exclude highlighted items, including share-based
Slide 5: Cash Flow
CASH FLOW (M$) Q1 22 Q1 23 CHANGE FY 22 FY 23E CHANGE OPERATING CASH $152 ($8) ($160) $1,823 $1,900 $77 FLOW CAPITAL ($54) ($54) - ($256) ($265) ($9) EXPENDITURES FREE CASH FLOW* $98 ($62) ($160) $1,567 $1,635 $68 * Free Cash Flow is a non-GAAP financial measure and is calculated as Net cash provided
Slide 6: Products & SI
PRODUCTS & SI Q1 2023 • Revenue up 18%, driven by growth in LMR and Video Revenue • Non-GAAP operating margin* up 1,020 bps driven by ($M) higher sales, lower direct material costs and improved operating leverage • Notable wins and achievements: • $27M countywide P25 system for Johnson County, MO •
Slide 7: Software & Services
SOFTWARE & • Revenue up 10%, driven by growth in LMR services, Command SERVICES Center and Video Q1 2023 Revenue • Non-GAAP operating margin* down 230 bps driven by mix, ($M) higher expenses from acquisitions and FX • Notable multi-year wins and achievements: • $340M ten-year IDIQ award from the U.S
Slide 8: Regional Revenue
REGIONAL ($M) Q1 22 Q1 23 CHANGE REVENUE NORTH AMERICA $1,305 $1,492 14% Q1 2023 INTERNATIONAL $587 $679 16% TOTAL $1,892 $2,171 15% ● North America growth driven by LMR, Video and Command Center ● International growth driven by LMR, Video and Command Center, partially offset by FX
Slide 9: Backlog Trend
Software and Services BACKLOG • Y/Y up $22M primarily driven by growth in multi-year TREND contracts in North America, partially offset by revenue recognition for Airwave, unfavorable FX and the backlog reduction related to the exit of ESN ($B) • Q/Q down $94M primarily driven by revenue recognition
Slide 10: Outlook
OUTLOOK * (NON-GAAP) Q2 2023 Q2 Details • Effective tax rate of approx. 24% Revenue Growth 10% - 11% • Fully diluted share count of approx. Non-GAAP EPS $2.49 - $2.54 173M shares PRIOR FULL-YEAR 2023 Revenue ($M) $9,650 - $9,700 Non-GAAP EPS $11.10 - $11.22 FULL-YEAR 2023 Full-Year Details • Effecti
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 * In January 2023, we began using Command Center as a naming convention, eliminating the "Software" descriptor from Command Center Software in order to inform investors that the company has software components more broadly across all technologies; this name cha
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; Net Debt
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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