Motorola Solutions, Inc. · NYSE:MSI
Motorola Solutions — Q4 2023 Earnings Presentation
24 slides from Motorola Solutions's earnings presentation, Feb 8, 2024
Slide 1: Earnings Presentation
Earnings Presentation Q4 and Full-Year 2023 Results | Feb. 8, 2024
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 Q4 2023
Sales of $2.8B, up 5% Y/Y Highlights ● ● Products and Systems Integration up 4% Q4 2023 ● Software and Services up 7% ● Growth in all technologies ■ Land Mobile Radio Communications (“LMR”) up 3% ■ Video Security and Access Control (“Video”) up 13% ■ Command Center up 14% ● GAAP EPS of $3.47, up 1%
Slide 4: Highlights FY 2023
• Sales of $10.0B, up 10% Y/Y Highlights ● Products and Systems Integration up 9% FY 2023 ● Software and Services up 10% ● Growth in all technologies ■ LMR up 8% ■ Video up 13% ■ Command Center up 21% • GAAP EPS of $9.93, up 25% Y/Y • Non-GAAP EPS1 of $11.95, up 15% Y/Y • GAAP operating margin of 23
Slide 5: Financial Results
Financial Results Q4 22 Q4 23 Change 2022 2023 Change Revenue $2,706 $2,848 5% $9,112 $9,978 10% Non-GAAP $822 $870 6% $2,368 $2,784 18% Operating Earnings* Non-GAAP 30.4% 30.5% 10 bps 26.0% 27.9% 190 bps Operating Margin* Non-GAAP $3.60 $3.90 8% $10.36 $11.95 15% Earnings Per Share* ($M) excluding
Slide 6: Cash Flow
Cash Flow (M$) Q4 22 Q4 23 Change 2022 2023 Change Operating Cash Flow $1,273 $1,245 ($28) $1,823 $2,044 $221 Capital Expenditures ($73) ($81) ($8) ($256) ($253) $3 Free Cash Flow* $1,200 $1,164 ($36) $1,567 $1,791 $224 * Free Cash Flow is a non-GAAP financial measure and is calculated as Net cash pr
Slide 7: Products & SI Q4 2023
Products & SI • Revenue up 4%, driven by growth in LMR and Video Q4 2023 • Non-GAAP operating margin* up 160 bps driven by higher sales and lower direct material costs Revenue ($M) • Notable wins and achievements: • $90M P25 system and devices order for a U.S. customer • $67M P25 device order for Em
Slide 8: Software & Services Q4 2023
• Revenue up 7%, driven by growth in Video, Command Software & Services Center and LMR • Non-GAAP operating margin* down 280 bps primarily Q4 2023 driven by the Airwave revenue reduction, partially offset Revenue by improved operating leverage ($M) • Notable wins and achievements: • $330M+ LMR manag
Slide 9: Regional Revenue Q4 2023
Regional Revenue Q4 2023 (M$) Q4 22 Q4 23 Change ● North America growth driven by LMR, Video and Command North America $1,898 $2,016 6% Center ● International growth driven by $808 $832 3% Video and LMR, partially offset International by the revenue reduction for Airwave Total $2,706 $2,848 5%
Slide 10: Regional Revenue FY 2023
Regional Revenue FY 2023 (M$) 2022 2023 Change ● North America growth driven by LMR, Video and Command North America $6,374 $6,932 9% Center ● International growth driven by $2,738 $3,046 11% LMR and Video, partially offset International by the revenue reduction for Airwave and FX Total $9,112 $9,97
Slide 11: Backlog Trend
Backlog Trend Software & Services Q4 2023 • Y/Y down $181M primarily driven by a ~$1B* reduction related to Airwave and ESN, partially offset by strong growth ($B) in multi-year software and services contracts in both regions $14.3 $14.3 $14.3 • Q/Q down $114M primarily driven by the reduction relat
Slide 12: Outlook
Outlook (Non-GAAP)* Q1 2024 Q1 Details Revenue Growth Approx. 8% ● Effective tax rate of approx. 23% ● Fully diluted share count of Non-GAAP EPS $2.50 - $2.55 approx. 172M shares Full-Year 2024 Full-Year Details Revenue Growth Approx. 6% ● Effective tax rate 23% to 24% ● Fully diluted share count No
Slide 13: 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 14: 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 15: Supplemental Disaggregation of Revenues
Supplemental Motorola Solutions, Inc. Disaggregation of Revenues Below is an updated presentation of the disaggregation of revenues for the Company’s major products and services for the three months ended and twelve months ended December 31, 2022 and 2023 to provide a more comprehensive view of the
Slide 16: Supplemental Non-GAAP Trends
Motorola Solutions, Inc. and Subsidiaries Supplemental Non-GAAP Trends (in millions, except for per share amounts) Non-GAAP Measures
Slide 17: Supplemental Reconciliation of EPS to Non-GAAP EPS
Motorola Solutions, Inc. and Subsidiaries Supplemental Reconciliation of EPS to Non-GAAP EPS Non-GAAP Measures
Slide 18: Reconciliation of EPS to Non-GAAP EPS
Motorola Solutions, Inc. and Subsidiaries Reconciliation of EPS to Non-GAAP EPS Supplemental Non-GAAP Measures
Slide 19: Reconciliations of Operating Earnings to Non-GAAP Operating Earnings
Motorola Solutions, Inc. and Subsidiaries Supplemental Reconciliations of Operating Earnings to Non-GAAP Operating Earnings and Operating Margin to Non-GAAP Operating Margin Non-GAAP (in millions) Measures
Slide 20: Reconciliations of Operating Earnings to Non-GAAP Operating Earnings
Motorola Solutions, Inc. and Subsidiaries Supplemental Reconciliations of Operating Earnings to Non-GAAP Operating Earnings and Operating Margin to Non-GAAP Operating Margin (in millions) Non-GAAP Measures
Slide 21: Reconciliation of Operating Cash Flow to Free Cash Flow
Supplemental Non-GAAP Motorola Solutions, Inc. and Subsidiaries Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow (in millions) Measures * Free Cash Flow is a non-GAAP financial measure and is calculated as Net cash provided by operating activities - Capital Expenditures.
Slide 22: Reconciliation of Net Earnings to EBITDA and Adjusted EBITDA
Supplemental Reconciliation Of GAAP Net Earnings To EBITDA and Adjusted EBITDA Non-GAAP Measures Net Debt to Net Debt Calculation Adjusted EBITDA Calculation *** Refer to slide 16 for details of highlighted items
Slide 23: Reconciliation of Net Earnings to EBITDA and Adjusted EBITDA
Supplemental Non-GAAP Reconciliation Of GAAP Net Earnings To EBITDA and Adjusted EBITDA Measures *** Refer to slide 16 for details of highlighted items
Slide 24: Solving for safer communities
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.