01—Abstract
Summary
Summary of the 10-K filed February 15, 2024. Cited figures are marked; the original filing is the authoritative source.
Motorola Solutions, Inc. (MSI) delivered a strong financial performance in fiscal year 2023, demonstrating robust growth and improved profitability across its key business segments.
The company reported a significant increase in net sales to $10.0 billiona, up 10% year-over-year, driven by broad-based growth in both its Products and Systems Integration and Software and Services segments. Operating earnings saw a substantial rise of 38% to $2.3 billion, reflecting improved gross margins and operational efficiencies. MSI's strategic focus on "solving for safer" through its integrated ecosystem of Land Mobile Radio Communications (LMR), Video Security, and Command Center technologies continues to resonate with its public safety and enterprise customers.
The company's investments in research and development, coupled with strategic acquisitions, are enhancing its technological capabilities, particularly in areas like AI-powered analytics and cloud-based solutions. MSI also demonstrated a commitment to shareholder returns, repurchasing approximately $804 millionb in shares and increasing its quarterly dividend by 11%. The company ended the year with a solid backlog of $14.3 billion, positioning it well for continued growth.
02—Key points
Key Highlights
- Net sales increased by 10% to $10.0 billion in 2023, driven by strong performance in both Products and Systems Integration (+9%) and Software and Services (+10%).
- Operating earnings surged by 38% to $2.3 billion in 2023, indicating improved profitability and operational leverage.
- The company returned $1.4 billion to shareholders through $804 million in share repurchases and $589 million in dividends, also increasing the quarterly dividend by 11%.
- Motorola Solutions continues to invest in innovation, with R&D expenditures increasing by 10% to $858 million in 2023.
- The backlog remained strong at $14.3 billion as of year-end 2023, providing good visibility into future revenue.
- Acquisitions played a role in growth, with notable additions in Video Security and Access Control (IPVideo Corporation) and Command Center (Rave Mobile Safety, Inc.).
- Gross margin improved significantly to 49.8% of net sales in 2023, up from 46.4% in 2022, attributed to higher sales and lower direct material costs.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2023, Motorola Solutions, Inc. kept $0.17.
- Revenue$9.98B100.0%
- Cost of revenue−$5.01B50.2%
- Gross profit$4.97B49.8%
- Operating costs−$2.68B26.8%
- Operating income$2.29B23.0%
- Interest, other & tax−$585.0M5.9%
- Net income$1.71B17.1%
Where FY2023 revenue went
$9.98B- Cost of revenue: $5.01B, 50% of revenue
- Net income: $1.71B, 17% of revenue
- SG&A: $1.56B, 16% of revenue
- R&D: $858.0M, 8.6% of revenue
- Other operating costs: $257.0M, 2.6% of revenue
- Interest, other & tax: $585.0M, 5.9% of revenue
Kept 17% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2023filed February 15, 2024Financial Statements
FY2023 against FY2022
| Line item | FY2023FY2022 | Change |
|---|---|---|
| Revenue | $9.98B$9.11B | +9.5% |
| Cost of Revenue | $5.01B$4.88B | +2.6% |
| Gross Profit | $4.97B$4.23B | +17.5% |
| R&D Expenses | $858.00M$779.00M | +10.1% |
| SG&A Expenses | $1.56B$1.45B | +7.7% |
| Operating Income | $2.29B$1.66B | +38.1% |
| Interest Expense | $249.00M$240.00M | +3.8% |
| Net Income | $1.71B$1.36B | +25.4% |
| EPS (Basic) | $10.23$8.14 | +25.7% |
| EPS (Diluted) | $9.93$7.93 | +25.2% |
| Shares Outstanding (Basic) | 167.00M167.50M | −0.3% |
| Shares Outstanding (Diluted) | 172.10M171.90M | +0.1% |
05—Questions
Frequently Asked Questions
What were the key drivers of Motorola Solutions' revenue growth in 2023?
Motorola Solutions' revenue grew by 10% to $10.0 billion in 2023, driven by an increase in both its Products and Systems Integration segment (up 9%) and its Software and Services segment (up 10%). Growth was attributed to strong demand for LMR Communications, Video Security solutions, and Command Center software and services across North America and international markets. Acquisitions also contributed to the revenue increase.
How did Motorola Solutions manage its profitability in 2023?
Motorola Solutions improved its profitability significantly in 2023, with operating earnings increasing by 38% to $2.3 billion. This was primarily due to higher gross margins, which rose to 49.8% from 46.4% in the prior year. The improvement in gross margin was a result of higher sales, lower direct material costs, and a favorable comparison to the prior year which included a fixed asset impairment loss.
What is the company's strategy regarding acquisitions and future growth?
Motorola Solutions' strategy involves integrating its LMR, Video, and Command Center technologies into a unified safety and security ecosystem. The company actively pursues strategic acquisitions to expand its technological capabilities and market reach. Recent acquisitions, such as IPVideo Corporation and Rave Mobile Safety, Inc., have bolstered its offerings in sensor technology and mass notification/incident management, respectively. MSI also continues to invest in R&D and expects growth from evolving public safety needs, cloud adoption, and AI-driven analytics.
How is the company returning capital to shareholders?
Motorola Solutions demonstrated a strong commitment to returning capital to shareholders in 2023. The company repurchased approximately $804 million of its common stock and paid $589 million in dividends. Furthermore, it announced an 11% increase in its quarterly dividend, signaling confidence in its financial performance and future cash flows.
06—Continue