Motorola Solutions, Inc. · NYSE:MSI
Motorola Solutions — Q4 2022 Earnings Presentation
24 slides from Motorola Solutions's earnings presentation, Feb 9, 2023
Slide 1: Earnings Presentation Q4 and Full-Year 2022 Results
EARNINGS PRESENTATION Q4 AND FULL-YEAR 2022 RESULTS | February 9, 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: Highlights Q4 2022
HIGHLIGHTS • Sales of $2.7B, up 17% vs. the prior year ○ Products and Systems Integration up 21% Q4 2022 ○ Software and Services up 9% ○ Growth in all technologies ■ Land Mobile Radio (“LMR”) up 16% ■ Video security and access control (“Video”) up 21% ■ Command center up 11% • GAAP EPS of $3.43, up
Slide 4: Highlights FY 2022
• Sales of $9.1B, up 12% vs. the prior year HIGHLIGHTS ○ Products and Systems Integration up 14% FY 2022 ○ Software and Services up 8% ○ Growth in all technologies ■ LMR up 9% ■ Video up 24% ■ Command center up 12% • GAAP EPS of $7.93; Non-GAAP EPS1 of $10.36, up 13% • Record backlog of $14.3B, incl
Slide 5: Financial Results
FINANCIAL RESULTS Q4 21 Q4 22 CHANGE 2021 2022 CHANGE REVENUE $2,320 $2,706 17% $8,171 $9,112 12% NON-GAAP $670 $822 23% $2,117 $2,368 12% OPERATING EARNINGS* NON-GAAP 28.9% 30.4% 150 bps 25.9% 26.0% 10 bps OPERATING MARGIN* NON-GAAP $2.85 $3.60 26% $9.15 $10.36 13% EARNINGS PER SHARE* ($M) excludin
Slide 6: Cash Flow
CASH FLOW FY 21 FY 22 ($M) ACT ACT CHANGE OPERATING CASH FLOW $1,837 $1,823 ($14) CAPITAL EXPENDITURES ($243) ($256) ($13) FREE CASH FLOW* $1,594 $1,567 ($27) * Free Cash Flow is a non-GAAP financial measure and is calculated as Net cash provided by operating activities - Capital Expenditures.
Slide 7: Products & SI
PRODUCTS & SI Q4 2022 • Revenue up 21%, driven by growth in LMR and Video Revenue • Non-GAAP operating margin* up 310 bps driven by higher sales ($M) and operating leverage, partially offset by higher direct material costs • Notable wins and achievements: • $45M P25 APX NEXT devices order for the ci
Slide 8: Software & Services
SOFTWARE & • Revenue up 9%, driven by growth in LMR services, Video and SERVICES Command center Q4 2022 Revenue • Non-GAAP operating margin* down 100 bps driven by mix and ($M) higher expenses from acquisitions • Notable multi-year wins and achievements: • $56M P25 multi-year managed service extensi
Slide 9: Regional Revenue Q4 2022
REGIONAL ($M) Q4 21 Q4 22 CHANGE REVENUE NORTH AMERICA $1,615 $1,898 18% Q4 2022 INTERNATIONAL $705 $808 15% TOTAL $2,320 $2,706 17% ● North America growth driven by LMR, Video and Command center ● International growth driven by LMR, Command center and Video, partially offset by FX
Slide 10: Regional Revenue FY 2022
REGIONAL ($M) 2021 2022 CHANGE REVENUE NORTH AMERICA $5,561 $6,374 15% FY 2022 INTERNATIONAL $2,610 $2,738 5% TOTAL $8,171 $9,112 12% ● North America growth driven by LMR, Video and Command center ● International growth driven by LMR, Video and Command center, partially offset by FX
Slide 11: Backlog Trend
Software and Services BACKLOG • Y/Y down $106M primarily driven by revenue recognition TREND for Airwave and ESN, unfavorable FX and the reduction related to the exit of ESN, partially offset by growth in multi-year contracts in North America ($B) • Q/Q up $769M primarily driven by FX and growth in
Slide 12: Outlook
OUTLOOK * (NON-GAAP) Q1 2023 Q1 Details Revenue Growth 12% - 13% • Effective tax rate of approx. 23% • Fully diluted share count of approx. Non-GAAP EPS $2.02 - $2.07 172M shares • Approx. $40M FX headwind FULL-YEAR 2023 Full-Year Details Revenue ($M) $9,650 - $9,700 • Effective tax rate 23% to 24%
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 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 16: Supplemental Non-GAAP Measures
SUPPLEMENTAL NON-GAAP MEASURES Motorola Solutions, Inc. and Subsidiaries Non-GAAP Trend (In millions, except for per share amounts)
Slide 17: Supplemental Non-GAAP Measures
SUPPLEMENTAL NON-GAAP MEASURES
Slide 18: Supplemental Non-GAAP Measures
SUPPLEMENTAL NON-GAAP MEASURES
Slide 19: Supplemental Non-GAAP Measures
SUPPLEMENTAL NON-GAAP MEASURES
Slide 20: Supplemental Non-GAAP Measures
SUPPLEMENTAL NON-GAAP MEASURES
Slide 21: 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 22: 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 16 for details of highlighted items
Slide 23: 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 16 for details of highlighted items
Slide 24: Thank You
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