10-QPeriod: Q3 FY2024

Motorola Solutions, Inc. Quarterly Report for Q3 Ended Sep 28, 2024

Filed November 7, 2024For Securities:MSI

Summary

Motorola Solutions, Inc. (MSI) reported strong financial results for the third quarter and first nine months of fiscal year 2024. The company demonstrated robust revenue growth driven by its Products and Systems Integration segment, which saw significant increases in LMR and Video sales. The Software and Services segment also contributed positively, with growth in Video and Command Center offerings, although partially offset by ongoing adjustments to Airwave services revenue. Profitability improved year-over-year, with notable increases in gross margin and operating earnings. Diluted earnings per share saw a substantial increase, reflecting the company's operational efficiency and growth. MSI continued to execute its capital allocation strategy, repurchasing shares and paying dividends, while also actively pursuing strategic acquisitions to expand its technology portfolio, particularly in software and services. The company's financial position remains strong, with substantial operating cash flow generation and a well-managed debt profile.

Financial Highlights

54 data points
Beta

Revenue

$2.79B

51.4% Gross Margin

Net Income

$562.00M

20.1% Net Margin

EPS (Diluted)

$3.29

Total Assets

$13.89B

Cash & Equivalents

$1.40B

Free Cash Flow

$759.00M

Financial Statements
Beta
Revenue$2.79B
Cost of Revenue$1.36B
Gross Profit$1.43B
R&D Expenses$234.00M
SG&A Expenses$439.00M
Operating Income$711.00M
Interest Expense$73.00M
Net Income$562.00M
EPS (Basic)$3.36
EPS (Diluted)$3.29
Shares Outstanding (Basic)167.10M
Shares Outstanding (Diluted)170.90M

Key Highlights

  • 1Net sales increased by 9% to $2.8 billion for the third quarter of 2024 compared to $2.56 billion in the same period last year.
  • 2Operating earnings grew by 11% to $711 million for the third quarter of 2024, up from $639 million in the prior year's quarter.
  • 3Diluted earnings per share rose to $3.29 in the third quarter of 2024, a significant increase from $2.70 in the third quarter of 2023.
  • 4The Products and Systems Integration segment saw net sales increase by 11%, driven by growth in LMR and Video offerings.
  • 5The Software and Services segment's net sales increased by 7%, supported by Video and Command Center solutions, despite adjustments to Airwave services revenue.
  • 6Operating cash flow for the first nine months of 2024 was $1.32 billion, a substantial increase from $799 million in the same period last year.
  • 7The company completed several strategic acquisitions during the period, including Noggin, a critical event management software provider, and businesses focused on vehicle location and management solutions, further strengthening its Software and Services portfolio.

Frequently Asked Questions

Revenue growth in the third quarter was primarily driven by a 9% increase in net sales to $2.8 billion. The Products and Systems Integration segment saw an 11% increase in net sales, fueled by strong performance in LMR and Video, while the Software and Services segment grew by 7%, supported by its Video and Command Center offerings.

Profitability showed significant improvement. Gross margin expanded to 51.4% from 50.1% in the prior year's quarter. Operating earnings increased by 11% to $711 million, and net earnings attributable to Motorola Solutions, Inc. rose to $562 million, resulting in a diluted EPS of $3.29, up from $2.70 in the third quarter of 2023.

Motorola Solutions has been actively acquiring companies to enhance its technology offerings, particularly in the Software and Services segment. Acquisitions like Noggin and others focused on vehicle management and specialized cameras are contributing to revenue growth and expanding the company's capabilities in areas like critical event management and video security. These acquisitions are reflected in the increased revenue and expenses, including R&D and SG&A.

The company continues to execute its capital allocation strategy. For the first nine months of 2024, Motorola Solutions repurchased $141 million of common stock and paid $490 million in dividends. With a strong operating cash flow of $1.32 billion for the same period, the company maintains sufficient liquidity and has approximately $2.3 billion of authority remaining under its share repurchase program.