01—Abstract
Summary
Summary of the 10-Q filed November 7, 2024. Cited figures are marked; the original filing is the authoritative source.
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.
02—Key points
Key Highlights
- Net 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.
- Operating earnings grew by 11% to $711 million for the third quarter of 2024, up from $639 million in the prior year's quarter.
- Diluted 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.
- The Products and Systems Integration segment saw net sales increase by 11%, driven by growth in LMR and Video offerings.
- The Software and Services segment's net sales increased by 7%, supported by Video and Command Center solutions, despite adjustments to Airwave services revenue.
- Operating 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.
- The 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.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2024, Motorola Solutions, Inc. kept $0.20.
- Revenue$2.79B100.0%
- Cost of revenue−$1.36B48.6%
- Gross profit$1.43B51.4%
- Operating costs−$722.0M25.9%
- Operating income$711.0M25.5%
- Interest, other & tax−$149.0M5.3%
- Net income$562.0M20.1%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2024filed November 7, 2024Financial Statements
Q3 FY2024 against Q3 FY2023
| Line item | Q3 FY2024Q3 FY2023 | Change |
|---|---|---|
| Revenue | $2.79B$2.56B | +9.2% |
| Cost of Revenue | $1.36B$1.28B | +6.3% |
| Gross Profit | $1.43B$1.28B | +12.0% |
| R&D Expenses | $234.00M$215.00M | +8.8% |
| SG&A Expenses | $439.00M$380.00M | +15.5% |
| Operating Income | $711.00M$639.00M | +11.3% |
| Interest Expense | $73.00M$60.00M | +21.7% |
| Net Income | $562.00M$464.00M | +21.1% |
| EPS (Basic) | $3.36$2.78 | +20.9% |
| EPS (Diluted) | $3.29$2.70 | +21.9% |
| Shares Outstanding (Basic) | 167.10M166.70M | +0.2% |
| Shares Outstanding (Diluted) | 170.90M171.70M | −0.5% |
05—Questions
Frequently Asked Questions
What was the primary driver of revenue growth in the third quarter?
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.
How did the company's profitability change compared to the prior year?
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.
What is the impact of the company's acquisitions on its financial performance?
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.
How is the company managing its capital and returning value to shareholders?
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.
06—Continue