Motorola Solutions (MSI) 2025 Conference June 04, 2025 12:20 PM ET Speaker0 My name is Tomer Zilberman. I'm joined today by Jack Malloy, chief operating officer of Motorola Solutions. Jack, first of all, thank you for being here with us. Before we get into it, I wanted to just talk about your role as COO. Maybe you could talk about your purview, kind of what part of the Speaker1 business that you own. Okay, sure, Tomer. Thanks. And it's good to see everybody. So from a day to day standpoint, I oversee, you ...

Summary of Motorola Solutions (MSI) FY Conference Call - May 13, 2025 Company Overview - **Company**: Motorola Solutions (MSI) - **Event**: FY Conference Call - **Date**: May 13, 2025 - **Key Speaker**: Greg Brown, CEO Key Industry Insights - **Public Safety Sector**: Motorola is heavily involved in the public safety vertical, with 70% of revenue derived from government contracts and 30% from enterprise sectors [12][13][18] - **Market Stability**: The public safety sector exhibits consistent spending behavior regardless of macroeconomic conditions, indicating a low beta stock performance [12][13][14] - **International Revenue**: Approximately 30% of revenue comes from international markets, primarily from long-term annuity-based managed services, which provide stability during turbulent times [18][21] Product and Technology Highlights - **SVX and AI Assist**: Introduction of the SVX product, a converged device combining a speaker mic and body-worn camera, which enhances situational awareness through AI-assisted audio and video integration [5][10][68] - **Drone Technology**: Investments in drone technology through companies like Brink and SkySafe, focusing on drone as a first responder and counter-drone capabilities [8][9][10] - **Command Center Revenue**: The command center business is projected to generate $800 to $900 million in revenue, with a presence in approximately 3,500 of the 6,000 public safety answering points (PSAPs) in the U.S. [33][34] Financial Performance and Strategy - **Revenue Growth**: The company anticipates a revenue growth of approximately 5.5% for the fiscal year, with a focus on maintaining operating margins and cash flow growth [77][78] - **Tariff Impact**: Motorola has calculated a $100 million net headwind due to tariffs but has managed to maintain revenue levels through strategic supply chain actions and increased working capital [24][25][28] - **Recurring Revenue**: The software and services segment is approaching 40% of total revenue, reflecting a shift towards recurring revenue models [50] Customer Engagement and Market Dynamics - **Customer Relationships**: Strong relationships with customers in the public safety sector, characterized by a high attach rate for new applications and devices [44][49] - **Market Penetration**: The company is focused on expanding its market share in the body-worn camera segment, competing effectively against established players [63][66][70] - **Budget Allocation**: Public safety budgets are generally healthy, with funding primarily from state and local sources, mitigating risks associated with federal funding changes [78][79] Future Outlook - **Product Development**: Continuous innovation in product offerings, particularly in AI applications for emergency response, is expected to enhance customer value and drive revenue growth [56][59] - **Market Opportunities**: The company sees significant potential in expanding its addressable market for both public safety and enterprise solutions, particularly with the integration of new technologies [62][64] Conclusion Motorola Solutions is well-positioned in the public safety sector, demonstrating resilience in revenue generation despite macroeconomic challenges. The company's focus on innovative product development, strategic investments in technology, and strong customer relationships are key drivers for future growth.

Motorola Solutions (MSI) Q1 2025 Earnings Call May 01, 2025 05:00 PM ET Company Participants Tim Yocum - Vice President-Investor RelationsGreg Brown - Chairman and Chief Executive OfficerJason Winkler - Executive VP & CFOAlyssa Shreves - Vice President - Equity ResearchJoseph Cardoso - Vice President, Equity ResearchJamie Reynolds - Senior Equity Research AssociateMahesh Saptharishi - Executive VP & CTOJack Molloy - Executive Vice President and Chief Operating OfficerTomer Zilberman - Equity Research Associ ...

Financial Data and Key Metrics Changes - The company reported record first quarter revenue, operating earnings, and cash flow, with revenue growth of 6% compared to the previous year [7][11] - GAAP operating earnings were $582 million, representing 23% of sales, an increase from 21.7% in the prior year [11] - Non-GAAP operating earnings were $716 million, up 12% year-over-year, with a non-GAAP operating margin of 28.3%, an increase of 160 basis points [11][12] - GAAP earnings per share (EPS) was $2.53, up from a loss of $0.23 in the year-ago quarter, while non-GAAP EPS was $3.18, a 13% increase from $2.81 [11][12] - Operating cash flow for Q1 was $510 million, up $128 million from last year, and free cash flow was $473 million, an increase of $137 million [12] Business Line Data and Key Metrics Changes - In the Software and Services segment, sales increased by 9%, driven by strong adoption of software applications [7][14] - The Products and SI segment saw a 4% increase in sales, with significant operating margin expansion due to growth in higher-tier public safety devices and lower material costs [8][14] - Notable achievements included various large orders in both segments, indicating strong demand across product lines [14][15] Market Data and Key Metrics Changes - North America Q1 revenue was $1.9 billion, up 9%, while international revenue was $676 million, down 3% due to currency headwinds and lower LMR revenue from Ukraine [15] - Ending backlog for Q1 was $14.1 billion, down 2% year-over-year, driven by strong LMR shipments and revenue recognition [16] Company Strategy and Development Direction - The company is focused on expanding its public safety ecosystem with new products and solutions, including recent acquisitions and product launches [8][24] - Investments in video and software are expected to drive meaningful revenue growth, with a strong emphasis on cloud and SaaS offerings [18][19] - The company is navigating tariff-related cost increases through supply chain actions and cost-saving measures [18][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning, noting that customers continue to prioritize investments in safety and security [9][21] - The outlook for Q2 includes expected sales growth of approximately 4% and non-GAAP EPS guidance between $3.32 and $3.37 [17] - For the full year, the company anticipates revenue growth of 5.5% and non-GAAP EPS between $14.64 and $14.74 [17] Other Important Information - The company successfully renewed its $2.25 billion revolving credit facility, enhancing its financial flexibility [20] - The introduction of new technologies like SVX and Assist is expected to transform public safety operations and drive further adoption of higher-tier radios [22][23] Q&A Session Summary Question: Can you walk us through the video product revenue performance in the quarter? - Video revenue grew nicely, with software leading that growth, and the cloud video offer, Alta, performing well [27][28] Question: Are you seeing any change in customer behavior due to tariffs? - There has been no significant change in customer behavior, and the company is proactively managing tariff impacts [30][31] Question: Can you comment on demand trends and the full-year revenue guide? - Demand remains strong, with record orders in Q1, and the company does not see any softening in demand [36][38] Question: What are the early demand signals for the new SVX product? - There is high interest from customers, with some planning to upgrade to the APEX NEXT family of radios after seeing the SVX demonstration [47][48] Question: How is the company navigating the current budget cycle and federal grant awards? - The public safety technology continues to be prioritized, and state and local budgets appear to be in good shape [84][85]