Motorola Solutions, Inc. · NYSE:MSI
Motorola Solutions — Q3 2023 Earnings Presentation
20 slides from Motorola Solutions's earnings presentation, Nov 2, 2023
Slide 1: Earnings Presentation Q3 2023 Results
EARNINGS PRESENTATION Q3 2023 RESULTS | November 2, 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 Q3 2023
HIGHLIGHTS • Sales of $2.6B, up 8% Y/Y Q3 2023 ○ Software and Services up 12% ○ Products and Systems Integration up 5% ○ Growth in all technologies ■ Land Mobile Radio Communications (“LMR”) up 6% ■ Video Security and Access Control (“Video”) up 8% ■ Command Center up 31% • GAAP EPS of $2.70, up 66%
Slide 4: Financial Results
FINANCIAL RESULTS Q3 22 Q3 23 CHANGE REVENUE $2,373 $2,556 8% NON-GAAP $676 $741 10% OPERATING EARNINGS* NON-GAAP 28.5% 29.0% 50 bps OPERATING MARGIN* NON-GAAP $3.00 $3.19 6% EARNINGS PER SHARE* ($M) excluding per share amounts * Non-GAAP measures exclude highlighted items, including share-based com
Slide 5: Cash Flow
CASH FLOW (M$) Q3 22 Q3 23 CHANGE FY 22 FY 23E CHANGE OPERATING CASH $388 $714 $326 $1,823 $1,900 $77 FLOW CAPITAL ($70) ($65) $5 ($256) ($265) ($9) EXPENDITURES FREE CASH FLOW* $318 $649 $331 $1,567 $1,635 $68 FY23E Cash Flow includes approx. $300M of higher cash taxes inclusive of a $70M one-time
Slide 6: Products & SI Q3 2023
PRODUCTS & SI • Revenue up 5%, driven by growth in LMR and Video Q3 2023 • Non-GAAP operating margin* up 160 bps driven by higher sales, lower direct material costs and improved Revenue operating leverage, partially offset by mix ($M) • Notable wins and achievements: • $75M P25 device order for a U.
Slide 7: Software & Services Q3 2023
SOFTWARE & • Revenue up 12%, driven by growth in Command Center, LMR SERVICES and Video Q3 2023 • Non-GAAP operating margin* down 170 bps primarily driven by Revenue the revenue deferral for Airwave, partially offset by higher ($M) sales and improved operating leverage • Notable multi-year wins and
Slide 8: Regional Revenue Q3 2023
REGIONAL ($M) Q3 22 Q3 23 CHANGE REVENUE NORTH AMERICA $1,687 $1,783 6% Q3 2023 INTERNATIONAL $686 $773 13% TOTAL $2,373 $2,556 8% ● North America growth driven by Command Center, LMR and Video ● International growth driven by LMR and Video
Slide 9: Backlog Trend
BACKLOG Software and Services TREND • Y/Y up $702M primarily driven by growth in multi-year software and services contracts in North America and favorable F/X, partially offset by revenue recognition for Airwave ($B) • Q/Q down $84M primarily driven by revenue recognition $13.5 $14.3 $14.3 for Airwa
Slide 10: Outlook
OUTLOOK * (NON-GAAP) Q4 2023 Q4 Details • Effective tax rate of approx. 24% Revenue Growth ~ 4% • Fully diluted share count of approx. Non-GAAP EPS $3.60 - $3.65 171M shares PRIOR FULL-YEAR 2023 Prior Full-Year Details • Effective tax rate 23% to 24% Revenue ($M) $9,875 - $9,900 • Fully diluted shar
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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