01—Abstract
Summary
Summary of the 10-K filed February 16, 2023. Cited figures are marked; the original filing is the authoritative source.
Motorola Solutions, Inc. (MSI) reported a strong year in 2022, demonstrating robust revenue growth driven by its core segments: Products and Systems Integration, and Software and Services.
The company's strategic focus on integrating Land Mobile Radio (LMR) Communications, Video Security, and Command Center technologies is yielding positive results, as evidenced by increased demand across all technology areas. MSI continued its acquisition strategy throughout the year, investing in companies that enhance its integrated solutions portfolio, particularly in video analytics and mass notification services. The company highlighted its commitment to returning capital to shareholders through share repurchases and dividend increases.
Despite facing macroeconomic headwinds such as supply chain disruptions and inflationary pressures, particularly in semiconductors, MSI managed its operations effectively, supported by pricing actions and strong customer demand. The company's significant backlog of $14.3 billiona at the end of 2022 provides visibility for future revenue. MSI's financial performance underscores its market leadership in public safety and enterprise security solutions, with a clear strategy for continued innovation and growth through technology integration.
02—Key points
Key Highlights
- Net sales increased by 12% year-over-year to $9.1 billion in 2022.
- Operating earnings remained stable at $1.7 billion, reflecting effective cost management amidst increased expenses from acquisitions and higher material costs.
- Net earnings attributable to Motorola Solutions, Inc. increased to $1.4 billion, or $7.93 per diluted common share, up from $1.2 billion, or $7.17 per diluted common share, in 2021.
- The company returned over $1.4 billion in capital to shareholders through share repurchases ($836 million) and dividends ($530 million).
- Backlog grew to $14.3 billion, an increase of $788 million compared to 2021, indicating strong future demand.
- Motorola Solutions executed several strategic acquisitions in 2022 to bolster its offerings in command center, LMR, and video security segments, including the significant acquisition of Rave Mobile Safety for $553 million.
- Research and development expenditures increased by 6% to $779 million, underscoring a commitment to innovation.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2022, Motorola Solutions, Inc. kept $0.15.
- Revenue$9.11B100.0%
- Cost of revenue−$4.88B53.6%
- Gross profit$4.23B46.4%
- Operating costs−$2.57B28.2%
- Operating income$1.66B18.2%
- Interest, other & tax−$298.0M3.3%
- Net income$1.36B15.0%
Where FY2022 revenue went
$9.11B- Cost of revenue: $4.88B, 54% of revenue
- SG&A: $1.45B, 16% of revenue
- Net income: $1.36B, 15% of revenue
- R&D: $779.0M, 8.5% of revenue
- Other operating costs: $339.0M, 3.7% of revenue
- Interest, other & tax: $298.0M, 3.3% of revenue
Kept 15% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2022filed February 16, 2023Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $9.11B$8.17B | +11.5% |
| Cost of Revenue | $4.88B$4.13B | +18.2% |
| Gross Profit | $4.23B$4.04B | +4.7% |
| R&D Expenses | $779.00M$734.00M | +6.1% |
| SG&A Expenses | $1.45B$1.35B | +7.2% |
| Operating Income | $1.66B$1.67B | −0.4% |
| Interest Expense | $240.00M$215.00M | +11.6% |
| Net Income | $1.36B$1.25B | +9.5% |
| EPS (Basic) | $8.14$7.36 | +10.6% |
| EPS (Diluted) | $7.93$7.17 | +10.6% |
| Shares Outstanding (Basic) | 167.50M169.20M | −1.0% |
| Shares Outstanding (Diluted) | 171.90M173.60M | −1.0% |
05—Questions
Frequently Asked Questions
What were the main drivers of Motorola Solutions' revenue growth in 2022?
Revenue growth in 2022 was primarily driven by increases in both the Products and Systems Integration segment (up 14%) and the Software and Services segment (up 8%). Growth was supported by strong demand for LMR Communications products and services, as well as advancements in Video Security and Command Center solutions. Acquisitions also contributed to revenue growth.
How did Motorola Solutions manage profitability despite supply chain challenges and inflation?
Motorola Solutions maintained stable operating earnings by implementing pricing actions to offset inflationary pressures and higher direct material and freight costs. While gross margins decreased slightly year-over-year due to these factors and an impairment loss related to the ESN contract exit, the company's operational efficiencies and strategic pricing helped to preserve profitability.
What is the significance of Motorola Solutions' acquisition strategy in 2022?
Motorola Solutions continued its strategic acquisition strategy in 2022, acquiring several companies such as Rave Mobile Safety, Ava Security, and Videotec. These acquisitions are aimed at enhancing the company's integrated technology ecosystem, particularly in areas like mass notification, video analytics, and ruggedized video security solutions, reinforcing its market leadership and expanding its product and service capabilities.
How is Motorola Solutions returning capital to shareholders?
In 2022, Motorola Solutions demonstrated a strong commitment to returning capital to shareholders. The company repurchased $836 million of its common stock and paid $530 million in dividends. Additionally, the Board of Directors increased the quarterly dividend by 11% to $0.88 per share, signaling confidence in future financial performance.
06—Continue