```markdown [First-Quarter 2024 Financial Results](index=1&type=section&id=First-Quarter%202024%20Financial%20Results) [Key Financial Highlights](index=1&type=section&id=Key%20Financial%20Highlights) Motorola Solutions reported record Q1 revenue of **$2.4 billion** and non-GAAP EPS of **$2.81**, leading to raised full-year guidance Q1 2024 Key Financial Results (in millions, except EPS) | Metric | Q1 2024 | Q1 2023 | % Change | | :--- | :--- | :--- | :--- | | **Sales** | $2,389 | $2,171 | 10% | | **GAAP Operating Earnings** | $519 | $399 | 30% | | **GAAP EPS** | ($0.23) | $1.61 | (114)% | | **Non-GAAP Operating Earnings** | $638 | $532 | 20% | | **Non-GAAP EPS** | $2.81 | $2.22 | 27% | - The GAAP EPS of **($0.23)** includes a significant non-operating loss of **($3.42)** per share due to the settlement accounting for the Silver Lake convertible debt[2](index=2&type=chunk) - The company achieved record Q1 operating cash flow of **$382 million**, a substantial increase from a usage of **$8 million** in the prior year, and ended the quarter with a record backlog of **$14.4 billion**[2](index=2&type=chunk)[4](index=4&type=chunk) - Strategic activities in the quarter included credit rating upgrades to BBB by S&P and Fitch, the issuance of **$1.3 billion** in long-term debt, the cash settlement of the Silver Lake convertible debt, and the acquisition of Silent Sentinel, a provider of long-range cameras[2](index=2&type=chunk)[4](index=4&type=chunk) [Segment Performance](index=1&type=section&id=Segment%20Performance) Products and Systems Integration sales grew **14%**, Software and Services **4%** (**12%** adjusted), with varied segment operating margins Q1 2024 Segment Sales and Non-GAAP Operating Earnings (in millions) | Segment | Q1 2024 Sales | YoY Change | Q1 2024 Non-GAAP OE | YoY Change | Q1 2024 Non-GAAP OE Margin | | :--- | :--- | :--- | :--- | :--- | :--- | | Products and Systems Integration | $1,490 | 14% | $370 | 50% | 24.8% | | Software and Services | $899 | 4% | $268 | (6)% | 29.8% | - Products and Systems Integration growth was driven by land mobile radio (LMR) communications and video security and access control (Video)[4](index=4&type=chunk) - Software and Services growth was driven by Video and Command Center solutions, but was partially offset by lower revenue from the U.K. Home Office due to the Airwave price control (the "Charge Control") and the exit from the Emergency Services Network (ESN) contract[4](index=4&type=chunk) [Other Selected Financial Results](index=2&type=section&id=Other%20Selected%20Financial%20Results) Non-GAAP operating margin improved to **26.7%**, operating cash flow reached **$382 million**, and total backlog hit **$14.4 billion** - Non-GAAP operating margin increased by **220 basis points** to **26.7%**, driven by higher sales, favorable mix, and improved operating leverage, which was partially offset by the U.K. Airwave Charge Control[4](index=4&type=chunk) - Operating cash flow was **$382 million**, compared to a usage of **$8 million** in Q1 2023 Free cash flow was **$336 million**, compared to a usage of **$62 million** in the prior-year quarter[4](index=4&type=chunk) - During the quarter, the company paid **$163 million** in dividends, repurchased **$39 million** of stock, and settled the Silver Lake convertible debt for **$1.59 billion** in cash[4](index=4&type=chunk) - Total ending backlog reached a record **$14.4 billion**, up **2%** YoY Software and Services backlog grew **$404 million** (**4%**), while Products and Systems Integration backlog declined **$74 million** (**2%**), primarily due to unfavorable foreign exchange rates[4](index=4&type=chunk) [Business Outlook](index=3&type=section&id=Business%20Outlook) [Q2 2024 and Full-Year 2024 Guidance](index=3&type=section&id=Q2%202024%20and%20Full-Year%202024%20Guidance) Motorola Solutions raised full-year 2024 guidance to **7%** revenue growth and **$12.98**-**$13.08** non-GAAP EPS, with Q2 outlook provided Q2 2024 Guidance | Metric | Guidance | | :--- | :--- | | Revenue Growth (YoY) | 7% to 8% | | Non-GAAP EPS | $2.97 to $3.02 | Updated Full-Year 2024 Guidance | Metric | New Guidance | Prior Guidance | | :--- | :--- | :--- | | Revenue Growth (YoY) | Approx. 7% | Approx. 6% | | Non-GAAP EPS | $12.98 to $13.08 | $12.62 to $12.72 | [Business & Operational Updates](index=3&type=section&id=Business%20%26%20Operational%20Updates) [Notable Wins](index=3&type=section&id=Notable%20Wins) The company secured significant LMR, Command Center, and P25 device orders across U.S. and international markets - **Software and Services Wins:** - **$25M** LMR services order for Douglas County, Colorado - **$25M** LMR services order for U.K. Department of Health - **$18M** Command Center order for San Francisco - **$14M** LMR services order for Lithuania - **$11M** LMR services order for São Paulo State Police, Brazil[8](index=8&type=chunk) - **Products and Systems Integration Wins:** - **$22M** P25 device order for large U.S. customer - **$16M** LMR order for an international customer - **$13M** LMR order for State of Tennessee - **$13M** mobile video order for North Carolina State Highway Patrol[8](index=8&type=chunk) [U.K. Home Office Update](index=3&type=section&id=U.K.%20Home%20Office%20Update) U.K. Home Office extended Airwave contract to 2029, adding **$748 million** to backlog, amidst ongoing CMA price control appeals - The CMA imposed a price control (the "Charge Control") on the Airwave network The company's appeal was dismissed by the Competition Appeal Tribunal (CAT), and it has now applied to the U.K. Court of Appeal to hear the case[8](index=8&type=chunk) - On March 13, 2024, the U.K. Home Office issued a Deferred National Shutdown Notice, extending the Airwave service from Dec 31, 2026, to Dec 31, 2029, at the reduced Charge Control rates[9](index=9&type=chunk) - As a result of the contract extension, the company recorded an additional **$748 million** in backlog in Q1 2024 The company has filed proceedings in the U.K. High Court to challenge the extension notice[10](index=10&type=chunk) [Legal Proceedings](index=5&type=section&id=Legal%20Proceedings) [Hytera Litigation Update](index=5&type=section&id=Hytera%20Litigation%20Update) Motorola Solutions continues Hytera litigation, securing a **$56 million** escrow payment and a worldwide sales injunction under appeal - The company was previously awarded a judgment against Hytera, which was later reduced to **$543.7 million** plus interest, costs, and fees The company is pursuing collection through the legal process[18](index=18&type=chunk) - After Hytera failed to make a court-ordered royalty payment, the court found Hytera in contempt, leading to a **$56 million** payment into a third-party escrow in September 2023 The funds will not be recognized until all contingencies are resolved[20](index=20&type=chunk) - In Q1 2024, a U.S. court found Hytera in contempt for not withdrawing competing litigation in China and issued a worldwide sales injunction on all Hytera radio products This injunction has been temporarily stayed pending an appeal by Hytera[22](index=22&type=chunk) [Financial Statements & Reconciliations](index=4&type=section&id=Financial%20Statements%20%26%20Reconciliations) [Use of Non-GAAP Financial Information](index=4&type=section&id=Use%20of%20Non-GAAP%20Financial%20Information) The company uses non-GAAP measures to present core operating performance, excluding non-recurring or non-operational items - Management uses non-GAAP measures to evaluate business performance and for incentive compensation targets, believing they enable better evaluation of the core business by excluding certain items[12](index=12&type=chunk) - Key exclusions from non-GAAP metrics include share-based compensation, intangible assets amortization expense, and various highlighted items like reorganization charges, legal settlements, and gains/losses on debt extinguishment[17](index=17&type=chunk)[24](index=24&type=chunk)[25](index=25&type=chunk) - Hytera-related legal expenses are excluded from non-GAAP results as of 2020 because management believes they are no longer part of "normal and recurring" legal expenses after the initial jury award[23](index=23&type=chunk) [Consolidated GAAP Financial Statements](index=9&type=section&id=Consolidated%20GAAP%20Financial%20Statements) GAAP statements show a **$39 million** net loss from debt extinguishment, **$13.3 billion** total assets, and **$382 million** operating cash flow [Condensed Consolidated Statements of Operations](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q1 2024 net sales were **$2.39 billion** with **49.9%** gross margin, but a **$609 million** expense led to a **$39 million** net loss Q1 2024 vs Q1 2023 Statement of Operations (in millions) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net sales | $2,389 | $2,171 | | Gross margin | $1,192 | $1,046 | | Operating earnings | $519 | $399 | | Total other expense | ($609) | ($41) | | Net earnings (loss) attributable to MSI | ($39) | $278 | [Condensed Consolidated Balance Sheets](index=10&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets were **$13.3 billion**, cash **$1.5 billion**, with debt shifting from current to long-term due to financing Balance Sheet Highlights (in millions) | Account | March 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total current assets | $5,521 | $5,725 | | Total assets | $13,326 | $13,336 | | Current portion of long-term debt | $313 | $1,313 | | Long-term debt | $5,994 | $4,705 | | Total Motorola Solutions, Inc. stockholders' equity | $521 | $724 | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations was **$382 million**, a strong recovery driven by debt extinguishment and working capital improvements Cash Flow Summary (in millions) | Activity | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net cash provided by (used for) operating activities | $382 | ($8) | | Net cash used for investing activities | ($47) | ($53) | | Net cash used for financing activities | ($512) | ($263) | | Net decrease in total cash and cash equivalents | ($193) | ($303) | [GAAP to Non-GAAP Reconciliations](index=12&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliations) This section details GAAP to non-GAAP reconciliations, quantifying adjustments for debt extinguishment and share-based compensation [Free Cash Flow Reconciliation](index=12&type=section&id=Free%20Cash%20Flow%20Reconciliation) Q1 2024 free cash flow was **$336 million**, from **$382 million** operating cash flow less **$46 million** capital expenditures Q1 2024 Free Cash Flow (in millions) | Metric | Amount | | :--- | :--- | | Net cash provided by operating activities | $382 | | Capital expenditures | ($46) | | **Free cash flow** | **$336** | [Net Earnings and EPS Reconciliation](index=13&type=section&id=Net%20Earnings%20and%20EPS%20Reconciliation) GAAP to non-GAAP EPS reconciliation adjusts **($0.23)** GAAP loss to **$2.81** non-GAAP EPS, mainly from **$3.42** debt extinguishment add-back Q1 2024 EPS Reconciliation (GAAP to Non-GAAP) | Description | Per Share Amount | | :--- | :--- | | **GAAP Diluted EPS** | **($0.23)** | | Loss from extinguishment of Silver Lake Debt | $3.42 | | Share-based compensation expenses | $0.32 | | Intangible assets amortization expense | $0.23 | | Other adjustments (net) | $0.17 | | Income tax expense on adjustments | ($1.10) | | **Non-GAAP Diluted EPS** | **$2.81** | [Operating Earnings by Segment Reconciliation](index=15&type=section&id=Operating%20Earnings%20by%20Segment%20Reconciliation) Total GAAP operating earnings of **$519 million** adjusted to **$638 million** non-GAAP, with segment-specific adjustments Q1 2024 Operating Earnings Reconciliation (in millions) | Segment | GAAP OE | Total Adjustments | Non-GAAP OE | | :--- | :--- | :--- | :--- | | Products and Systems Integration | $310 | $60 | $370 | | Software and Services | $209 | $59 | $268 | | **Total** | **$519** | **$119** | **$638** | [Organic Revenue Reconciliation](index=16&type=section&id=Organic%20Revenue%20Reconciliation) Q1 2024 organic revenue was **$2.379 billion**, a **10%** YoY growth, after adjusting for **$10 million** in acquisitions Q1 2024 Organic Revenue (in millions) | Metric | Amount | | :--- | :--- | | Net sales | $2,389 | | Sales from acquisitions | ($10) | | **Organic revenue** | **$2,379** | [Net Sales Adjusted for U.K. Home Office Reconciliation](index=17&type=section&id=Net%20Sales%20Adjusted%20for%20U.K.%20Home%20Office%20Reconciliation) Software and Services net sales grew **12%** excluding U.K. Home Office, with total company net sales up **14%** adjusted Q1 2024 Net Sales Adjusted for U.K. Home Office (in millions) | Metric | Amount | YoY Change | | :--- | :--- | :--- | | Software and Services net sales | $899 | 4% | | Less: U.K. Home Office net sales | ($101) | N/A | | **S&S net sales adjusted for U.K. Home Office** | **$798** | **12%** | ```

Motorola Solutions, Inc.'s (MSI) shares have witnessed a steady uptrend since November 2023, barring minor hiccups, driven by improved market demand across its portfolio on the back of a flexible business model and solid cash flow.As a leading provider of mission-critical communication products and services worldwide, Motorola has a steady revenue stream from this niche market. The communications equipment maker intends to boost its position in the public safety domain by entering into strategic alliances w ...

Motorola Solutions (MSI) recently announced the launch of cutting-edge solutions with advanced capabilities and flexible integration that enhance threat detection and simplify security operations. The company is demonstrating the latest suite of cloud-managed and on-premise solutions at Expo Seguridad in Mexico City.The company set out to demonstrate the Avigilon Alta, a cloud-native solution with AI-powered intelligent analytics for video security and access control. The company is introducing an add-on ca ...

Financial Performance - In 2023, Motorola Solutions reported consolidated net sales of $9.9 billion, with the Products and Systems Integration segment contributing $6.2 billion (63%) and the Software and Services segment contributing $3.7 billion (37%) to total sales[21][30]. - The company declared quarterly dividends of $0.88 per share for the first three quarters and $0.98 per share for the fourth quarter of fiscal 2023[198]. - As of December 31, 2023, Motorola Solutions had repurchased approximately $15.5 billion of its shares under a $18.0 billion share repurchase program, leaving about $2.5 billion available for future repurchases[202]. - The five-year cumulative total shareholder return for Motorola Solutions was $292.59 as of December 31, 2023, compared to $207.04 for the S&P 500[204]. Sales Composition - The LMR Communications technology accounted for 82% of the net sales within the Products and Systems Integration segment in 2023[25]. - Video technology represented 18% of the net sales in the Products and Systems Integration segment in 2023[29]. - Within the Software and Services segment, LMR Communications services made up 64% of total segment sales in 2023[33]. - Video technology accounted for 16% of the net sales in the Software and Services segment in 2023[38]. - The Command Center technology represented 20% of the net sales in the Software and Services segment in 2023[46]. Customer Base - The U.S. government and the Home Office of the United Kingdom were the largest customers, contributing approximately 8% and 6% of consolidated net sales in 2023, respectively[49]. Technology and Innovation - Motorola Solutions aims to enhance safety and security through an ecosystem of technologies, including LMR, Video, and Command Center solutions[19][20]. - The company focuses on integrating technologies to improve collaboration and operational efficiency for public safety and enterprise customers[20]. - Motorola Solutions continues to invest in cloud-based and hybrid solutions, cybersecurity services, and managed services to meet evolving customer needs[16][19]. - R&D expenditures increased to $858 million in 2023 from $779 million in 2022, with approximately 8,000 employees engaged in R&D activities[59]. - The company prioritizes investments in R&D to enhance its LMR Communications, Video, and Command Center technologies[58]. Backlog and Revenue Recognition - As of December 31, 2023, the company's backlog was $14,259 million, a slight decrease from $14,347 million in 2022, with 60% of the Products and Systems Integration backlog and 27% of the Software and Services backlog expected to be recognized as revenue in 2024[56]. - Approximately 60% of the backlog in the Products and Systems Integration segment is expected to be recognized as revenue during 2024[56]. Acquisitions - The company made several acquisitions, including Rave Mobile Safety for $553 million in December 2022 and IPVideo Corporation for $170 million in December 2023, enhancing its capabilities in mass notification and video security[57]. - The company issued 15,831 shares of common stock valued at $5 million in connection with the acquisition of IPVideo Corporation on December 15, 2023[199]. Workforce and Employment - As of December 31, 2023, the company employed approximately 21,000 people globally, with 53% in North America and 47% in the International region[78]. - 40% of the total global employees were employed in engineering roles[78]. - The company launched the GO ALL INclusive initiative in 2023 to promote diversity, equity, and inclusion, and designated Juneteenth and National Day for Truth and Reconciliation as paid holidays starting in 2024[83]. - The company offers a comprehensive total rewards package, including stock grants, bonuses, healthcare, and flexible work options, to attract and retain talent[82]. - The company emphasizes structured mentorship and training programs to develop employee skills and foster a supportive workplace[80]. Regulatory and Compliance Risks - The company is subject to complex and changing laws regarding privacy and data protection, which may increase compliance costs and potential liabilities[91]. - The EU's General Data Protection Regulation (GDPR) imposes significant obligations on the company regarding data protection and privacy rights[92]. - The company faces regulatory risks related to AI and biometrics, with potential compliance requirements expected to increase in the coming years[96]. - The company’s business is dependent on U.S. government contracts, which are subject to strict compliance requirements and oversight audits[102]. - Regulatory changes in telecommunications may expose the company to increased costs and potential liabilities if compliance is not maintained[104]. - The company is subject to various international regulations that can increase operational costs and compliance obligations, potentially impacting business performance[106]. - Future legislative and regulatory changes may increase compliance complexity and costs, affecting the company's financial position[107]. - The evolving state of environmental regulations related to climate change may lead to increased costs and operational restrictions, impacting financial performance[108]. - Physical risks from climate change, such as extreme weather, could disrupt supply chains and increase operational costs, including potential damages from such events[109]. - The company faces a wide range of product regulatory and safety compliance laws that could impact growth and financial performance[110]. Market and Economic Risks - Global economic and political conditions, including inflation and conflicts, continue to create uncertainties that could impact the company's financial performance[164]. - Political instability in various markets could significantly impact the company's growth and operational capabilities[166]. - The company faces significant global risks, including currency fluctuations, import/export regulations, and compliance with various laws, which could negatively impact its financial condition and results of operations[149]. Cybersecurity and IT Risks - Increased cybersecurity threats could lead to significant disruptions in IT systems, negatively impacting operations and sales[128]. - The company relies on outsourced partners for IT and network connectivity, which exposes it to elevated risks due to lack of direct oversight[129]. - A cyberattack could result in substantial costs for repairing IT systems and potential loss of critical data, impacting financial condition and cash flow[130]. - The complexity and scale of systems to be protected against cyber threats continue to increase, heightening vulnerability[128]. - The company maintains insurance related to cybersecurity risks and employs various countermeasures to protect its systems[128]. - The company has a comprehensive cybersecurity program to manage risks, including third-party assessments and insurance coverage[171][177]. Supply Chain and Operational Risks - The company’s ability to meet customer demands is dependent on timely procurement of quality materials and components from suppliers[142]. - The company relies on third-party providers for manufacturing and services, which could lead to difficulties in fulfilling orders and negatively impact sales and profits[151]. - Quality issues in products could lead to delays in revenue recognition, increased costs, and damage to the company's reputation[157]. - Suppliers may significantly increase prices in response to raw material costs, potentially impacting the company's financial results[144]. Financial and Tax Risks - The company has large underfunded pension obligations, which are affected by financial market performance and interest rates, potentially requiring additional large contributions in poor market conditions[165]. - Tax policy changes and audits may negatively affect the company's financial condition and results of operations, increasing effective tax rates[113][116]. - The company may face liquidity issues if credit ratings are downgraded, impacting access to capital markets and ability to repay debt[166]. - The company is rated investment grade by all three national rating agencies, and any downgrade could limit access to capital markets and increase borrowing costs[168]. Strategic Challenges - The company anticipates challenges in developing new technologies and products, which could impact market share and financial performance[117][119]. - Strategic acquisitions are expected to continue, but they introduce risks related to integration and achieving anticipated benefits[124]. - Acquisitions may involve higher relative valuations, potentially diluting earnings if pursued[125]. - Retaining key employees from acquired businesses may be challenging, impacting integration efforts[126]. - The company enters large, multi-year contracts that expose it to various risks, including technological, financial, and cybersecurity risks[145]. - The company has experienced challenges in budgeting and forecasting due to economic uncertainties, which could negatively impact financial results[166]. - The company utilizes subcontractors for many contracts, and their inability to perform could negatively affect the company's business and compliance with regulations[154]. - The competition for skilled employees, particularly in software development and engineering, is intense, which could hinder the company's ability to attract and retain talent[162].

Financial Data and Key Metrics Changes - Revenue for Q4 2023 grew by 5% year-over-year, reaching $2.9 billion, exceeding guidance with growth across all segments and regions [5][100] - GAAP operating earnings were $738 million, representing 25.9% of sales, an increase from 25.6% in the prior year [5] - Non-GAAP earnings per share (EPS) was $3.90, up 8% from $3.60 in the previous year, driven by higher sales and margins [5][6] - For the full year, non-GAAP EPS was $11.95, a 15% increase from $10.36 in 2022 [6] - Operating cash flow for the full year was a record $2 billion, up 12% from the previous year [4][101] Business Line Data and Key Metrics Changes - In the Software and Services segment, Q4 revenue increased by 7%, driven by growth in Video, Command Center, and LMR [7] - The Products and SI segment saw Q4 sales rise by 4%, with operating earnings of $567 million, or 30.0% of sales, up from 28.4% in the prior year [23][120] - Full year revenue for Software and Services was $3.7 billion, up 10%, while Products and SI revenue was $6.2 billion, also up 9% [7][120] Market Data and Key Metrics Changes - North America revenue for Q4 was $2 billion, up 6%, while international revenue was $832 million, up 3% [102] - Full year international revenue reached $3 billion, an 11% increase, driven by growth in LMR and Video [102] Company Strategy and Development Direction - The company announced a strategic partnership with Google Cloud to enhance its video security capabilities through AI and cloud technology [9] - The focus remains on public safety and enterprise security, with a commitment to expanding cloud offerings and improving product portfolios [105][127] - The company is pursuing a multi-cloud strategy, leveraging partnerships with both Google and Azure to enhance service delivery [25][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a strong backlog and pipeline, anticipating a revenue growth of approximately 6% for the full year 2024 [8][15] - The company expects Q1 sales to increase by about 8%, with non-GAAP EPS projected between $2.50 and $2.55 [8] - Management highlighted the importance of public safety funding and the ongoing demand for safety solutions as key drivers for future growth [127] Other Important Information - The company generated record free cash flow of $1.8 billion for the full year [101] - A strategic manufacturing agreement with Jabil was established to optimize the video supply chain and enhance scalability [125] - The company plans to appeal a UK court decision regarding Airwave, which is expected to take several months [64] Q&A Session Summary Question: What are the growth expectations for the Video segment? - Management indicated that Video Security is expected to grow by 10%, driven by strong cloud adoption and the Alta platform [103][133] Question: How is the backlog trending? - Management noted that the backlog is strong, with over 95% coming from government customers, and expects continued growth despite some reductions related to Airwave [38][124] Question: Can you provide an update on the Airwave situation? - The company plans to file an appeal with the UK Court of Appeals next week, believing the previous decision is legally flawed [64] Question: What is the outlook for capital allocation in 2024? - Management expressed a flexible approach to capital allocation, with a focus on share repurchases, dividends, and potential acquisitions [62] Question: How is the company addressing supply chain challenges? - Management reported improvements in supply chain operations and expects continued benefits from reduced costs in 2024 [107][115]

| --- | --- | --- | --- | --- | |---------------------------------------------|--------------------------------------------------------------------------------------------|-------|-------|----------------------------------------------------------------------------------------------------------------------| | | | | | | | Q4 2023 | Software & Services | | • | Non-GAAP operating margin* down 280 bps primarily driven by the Airwave revenue reduction, partially offset | | Revenue ($M) | | | • | by improved opera ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________________________________________ Form 10-Q ____________________________________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 1-7221 ______________________________ ...

Q2 2023 RESULTS | August 3, 2023 This presentation is being made on the 3rd day of August, 2023. The content of this presentation contains time-sensitive information that is accurate only as of the time hereof. If any portion of this presentation is rebroadcast, retransmitted or redistributed at a later date, Motorola Solutions will not be reviewing or updating the material that is contained herein. MOTOROLA, MOTOROLA SOLUTIONS and the Stylized M Logo are trademarks or registered trademarks of Motorola Trad ...

Financial Data and Key Metrics Changes - Q2 revenue grew 12% year-over-year, exceeding guidance, with double-digit growth in both segments and all three technologies [102][138] - GAAP operating earnings were $518 million, or 21.6% of sales, up from 16.7% in the prior year, while non-GAAP operating earnings were $641 million, up 29% from the year-ago quarter [102][139] - Operating cash flow for Q2 was $93 million, up $83 million year-over-year, and free cash flow was $40 million, up $89 million [4] Business Line Data and Key Metrics Changes - In the Software and Services segment, revenue increased by 13%, with operating earnings up 15% [30][140] - The Products and Systems Integration segment saw sales rise by 12%, with operating earnings growing by 52% [101][102] - Ending backlog reached a record $14.3 billion, up 6% year-over-year, driven by strong demand across all technologies [33][138] Market Data and Key Metrics Changes - North America Q2 revenue was $1.6 billion, up 11%, while international revenue was $762 million, up 16% [110] - The company experienced currency headwinds of $23 million during the quarter, while acquisitions contributed an additional $20 million [102] Company Strategy and Development Direction - The company is focusing on enhancing its AI capabilities to improve public safety and enterprise security solutions [8][143] - Continued investment in software and services is expected to drive growth, with a strong pipeline for multiyear contracts [112][111] - The company is leveraging its global installed base to sell more value-added software and services [112] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand drivers for public safety and enterprise security, indicating a healthy business environment [39][146] - The company raised its full-year guidance for revenue and earnings per share, reflecting robust customer demand and a strong backlog [3][104] - Management noted that the funding environment for public sector remains strong, benefiting from increased tax receipts due to inflation [52][146] Other Important Information - Moody's upgraded the company's credit rating from Baa3 to Baa2, highlighting the strength of its balance sheet and liquidity [6] - The company anticipates approximately $1.9 billion in operating cash flow for the full year, with consistent cash flow linearity expected [4] Q&A Session All Questions and Answers Question: Clarification on expenses related to Airwave accounting - Management clarified that the accounting treatment for Airwave will result in an $80 million reduction in revenue for the back half of the year, but they remain confident in their overall business performance [9][145] Question: Insights on public sector funding and its evolution - Management indicated that the funding environment for public sector remains strong, with various tax streams benefiting from inflation, which has led to increased tax receipts [51][52] Question: Expectations for margins and profitability - Management expects to see continued margin expansion, with a projected $60 million benefit from lower broker fees in 2024 [42][119] Question: Status of the integration of Rave Wireless with VESTA - Management confirmed that the integration of Rave with VESTA is progressing well, enhancing public safety capabilities and driving demand in the education sector [171]

Motorola Solutions, Inc. (NYSE:MSI) Q1 2023 Earnings Conference Call May 4, 2023 5:00 PM ET And with that, I will turn it over to Greg. Welcome to the Motorola Solutions First Quarter 2023 Earnings Conference Call. Today???s call is being recorded. If you have any objections, please disconnect at this time. The presentation material and additional financial tables are posted on the Motorola Solutions Investor Relations website. In addition, a webcast replay of this call will be available on our website with ...