01—Abstract
Summary
Summary of the 10-K filed February 12, 2021. Cited figures are marked; the original filing is the authoritative source.
Motorola Solutions, Inc. (MSI) reported net sales of $7.4 billiona for the fiscal year ended December 30, 2020, a decrease of 6% from the previous year, largely attributed to a decline in the Products and Systems Integration segment (-13%) due to COVID-19 impacts on public safety LMR and PCR sales.
However, the Software and Services segment showed resilience with a 9% increase in net sales, driven by growth in Video Security and Analytics, Command Center Software, and LMR services. The company demonstrated strong operational cash flow of $1.6 billionb and returned over $1.0 billion to shareholders through share repurchases and dividends, including an 11% increase in its quarterly dividend. MSI continues to strategically invest in its three core technology areas: LMR Mission Critical Communications, Command Center Software, and Video Security and Analytics, with a focus on integrating these into a unified ecosystem.
The company made several strategic acquisitions in 2020 to bolster its capabilities in these areas, particularly in Video Security and Analytics and Command Center Software. Despite a challenging macroeconomic environment influenced by COVID-19, Motorola Solutions remains focused on its long-term strategy, anticipating continued demand for its mission-critical solutions and leveraging its diversified business segments for future growth.
02—Key points
Key Highlights
- Net sales decreased by 6% to $7.4 billion in 2020, primarily due to a 13% decline in the Products and Systems Integration segment, while the Software and Services segment grew by 9%.
- Operating earnings decreased to $1.4 billion in 2020 from $1.6 billion in 2019.
- Net earnings attributable to Motorola Solutions, Inc. increased to $949 million, or $5.45 per diluted share, in 2020, compared to $868 million, or $4.95 per diluted share, in 2019.
- The company returned over $1.0 billion to shareholders in 2020 through $612 million in share repurchases and $436 million in dividends.
- Motorola Solutions completed several strategic acquisitions in 2020 to enhance its Video Security and Analytics and Command Center Software capabilities.
- The backlog at the end of 2020 stood at $11.4 billion, an increase of $175 million from the prior year.
- The company experienced a decrease in operating cash flow to $1.6 billion in 2020 from $1.8 billion in 2019.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2020, Motorola Solutions, Inc. kept $0.13.
- Revenue$7.41B100.0%
- Cost of revenue−$3.81B51.3%
- Gross profit$3.61B48.7%
- Operating costs−$2.23B30.0%
- Operating income$1.38B18.7%
- Interest, other & tax−$434.0M5.9%
- Net income$949.0M12.8%
Where FY2020 revenue went
$7.41B- Cost of revenue: $3.81B, 51% of revenue
- SG&A: $1.29B, 17% of revenue
- Net income: $949.0M, 13% of revenue
- R&D: $686.0M, 9.3% of revenue
- Other operating costs: $246.0M, 3.3% of revenue
- Interest, other & tax: $434.0M, 5.9% of revenue
Kept 13% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2020filed February 12, 2021Financial Statements
FY2020 against FY2019
| Line item | FY2020FY2019 | Change |
|---|---|---|
| Revenue | $7.41B$7.89B | −6.0% |
| Cost of Revenue | $3.81B$3.96B | −3.8% |
| Gross Profit | $3.61B$3.93B | −8.2% |
| R&D Expenses | $686.00M$687.00M | −0.1% |
| SG&A Expenses | $1.29B$1.40B | −7.8% |
| Operating Income | $1.38B$1.58B | −12.5% |
| Interest Expense | $233.00M$237.00M | −1.7% |
| Net Income | $949.00M$868.00M | +9.3% |
| EPS (Basic) | $5.58$5.21 | +7.1% |
| EPS (Diluted) | $5.45$4.95 | +10.1% |
| Shares Outstanding (Basic) | 170.00M166.60M | +2.0% |
| Shares Outstanding (Diluted) | 174.10M175.60M | −0.9% |
05—Questions
Frequently Asked Questions
What was the primary driver of Motorola Solutions' revenue decline in 2020?
The primary driver of Motorola Solutions' revenue decline in 2020 was a 13% decrease in the Products and Systems Integration segment. This was largely due to delays in customer engagement and reduced demand in public safety LMR and PCR (Professional Commercial Radio) business, influenced by the COVID-19 pandemic.
How did the Software and Services segment perform in 2020?
The Software and Services segment demonstrated strong performance, with net sales increasing by 9% to $2.8 billion in 2020. This growth was driven by increases in Video Security and Analytics, Command Center Software, and LMR services, reflecting resilient demand for these offerings.
What is Motorola Solutions' strategy regarding its technology offerings?
Motorola Solutions' strategy is to generate value through the integration of its three core technologies: LMR Mission Critical Communications, Command Center Software, and Video Security and Analytics. The company aims to create a unified ecosystem that unites voice, software, video, and analytics to enhance situational awareness, streamline workflows, and improve overall safety and productivity for its customers.
How did the company return capital to shareholders in 2020?
In 2020, Motorola Solutions returned over $1.0 billion to shareholders. This included approximately $612 million used for share repurchases under its ongoing share repurchase program and $436 million distributed as dividends. The company also increased its quarterly dividend by 11% to $0.71 per share in November 2020.
06—Continue