Motorola Solutions, Inc. · NYSE:MSI

Motorola Solutions — Q3 2022 Earnings Presentation

20 slides from Motorola Solutions's earnings presentation, Nov 3, 2022

1. Slide 1: Earnings Presentation Q3 2022 Results

   EARNINGS PRESENTATION Q3 2022 RESULTS | November 3, 2022

2. 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

3. Slide 3: Highlights Q3 2022

   • Sales of $2.4B, up 13% vs. the prior year HIGHLIGHTS ○ Products and Systems Integration up 15% Q3 2022 ○ Software and Services up 8% ○ Growth in all technologies ■ Land Mobile Radio (“LMR”) up 9% ■ Video security and access control (“Video”) up 33% ■ Command center software up 7% • GAAP EPS of $1.

4. Slide 4: Financial Results

   FINANCIAL RESULTS Q3 21 Q3 22 CHANGE REVENUE $2,107 $2,373 13% NON-GAAP $555 $676 22% OPERATING EARNINGS* NON-GAAP 26.3% 28.5% 220 bps OPERATING MARGIN* NON-GAAP $2.35 $3.00 28% EARNINGS PER SHARE* ($M) excluding per share amounts * Non-GAAP measures exclude highlighted items, including share-based

5. Slide 5: Cash Flow

   CASH FLOW Q3 21 Q3 22 (M$) YTD YTD CHANGE FY 21 FY 22E CHANGE OPERATING CASH $1,134 $550 ($584) $1,837 $1,775 ($62) FLOW CAPITAL ($175) ($183) ($8) ($243) ($250) ($7) EXPENDITURES FREE CASH FLOW* $959 $367 ($592) $1,594 $1,525 ($69) YTD Cash Flow includes: ● Continued inventory build** ● $75M higher

6. Slide 6: Products & SI Q3 2022 Revenue

   PRODUCTS & SI Q3 2022 • Revenue up 15%, driven by growth in LMR and Video Revenue • Non-GAAP operating margin* up 390 bps driven by higher sales ($M) and operating leverage, partially offset by increased direct material costs • Notable wins and achievements: • $400M+ 25 year Systems Integration agre

7. Slide 7: Software & Services Q3 2022 Revenue

   SOFTWARE & • Revenue up 8%, driven by growth in Video, LMR services and SERVICES command center software Q3 2022 Revenue • Non-GAAP operating margin* down 30 bps driven by higher ($M) expenses from acquisitions • Notable multi-year wins and achievements: • $43M services renewal for the state of Mary

8. Slide 8: Regional Revenue Q3 2022

   REGIONAL ($M) Q3 21 Q3 22 CHANGE REVENUE NORTH AMERICA $1,449 $1,687 16% Q3 2022 INTERNATIONAL $658 $686 4% TOTAL $2,107 $2,373 13% ● North America growth driven by LMR, Video and command center software ● International growth driven by Video, LMR and command center software, partially offset by FX

9. Slide 9: Backlog Trend

   Software and Services BACKLOG • Y/Y up $876M primarily driven by the extension of the TREND Airwave contract in Q4’21 and growth in multi-year contracts in North America, partially offset by FX • Q/Q down $426M primarily driven by FX and revenue ($B) recognition for Airwave and ESN, partially offset

10. Slide 10: Outlook

    Q4 Details OUTLOOK * Q4 2022 • Effective tax rate of approx. 23% (NON-GAAP) Revenue Growth Approx. 9% • Fully diluted share count of approx. 172M shares Non-GAAP EPS $3.40 - $3.45 • Approx. $90M FX headwind PRIOR FULL-YEAR 2022 Revenue Growth Approx. 8% Non-GAAP EPS $10.03 - $10.13 Full-Year Details

11. 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

12. 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

13. Slide 13: Supplemental Disaggregation of Revenue

    SUPPLEMENTAL DISAGGREGATION OF REVENUE

14. 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)

15. Slide 15: Supplemental Non-GAAP Measures

    SUPPLEMENTAL NON-GAAP MEASURES

16. Slide 16: Supplemental Non-GAAP Measures

    SUPPLEMENTAL NON-GAAP MEASURES

17. 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.

18. 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

19. 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

20. Slide 20: Thank You

    » MOTOROLA SOLUTIONS

Motorola Solutions — Q3 2022 Earnings Presentation on 6ix