Why has Motorola Solutions changed its reporting segments?

Motorola Solutions has changed its reporting segments to better align its internal financial reporting and analysis with how executive leadership views the business. This also reflects the growth and strategic importance of its Services and Software offerings, particularly those enhanced by recent acquisitions.

What are the new reporting segments?

The company now reports under two segments: 'Products and Systems Integration,' which includes infrastructure, devices, video solutions, and their integration; and 'Services and Software,' which encompasses repair, technical support, maintenance, monitoring, software updates, cybersecurity, managed services, and various software solutions delivered on-premise or as-a-service.

Does this change affect previously reported financial results?

This change affects how historical financial information is presented for comparative purposes. The company has recast selected historical financial data for Q1 2018, FY 2017, and FY 2016 to align with the new segment structure. However, this filing does not restate the company's previously reported consolidated financial statements.

What is the significance of the "Services and Software" segment?

The enhanced "Services and Software" segment highlights the company's increasing focus on recurring revenue streams and integrated solutions. This segment now includes a broader range of software applications and service offerings, reflecting a strategic shift towards higher-value, ongoing customer relationships.

MSI 8-K: Regulation FD

Summary

Motorola Solutions, Inc. (MSI) has filed an 8-K report detailing a change in its segment reporting structure, effective from the second quarter of 2018. This realignment is designed to better reflect the company's operational focus and the impact of recent acquisitions, particularly within its growing Services and Software division. The company has moved from two reporting segments (Products and Services) to two new segments: "Products and Systems Integration" and "Services and Software." This change aims to provide a clearer picture of revenue streams and operational performance to executive leadership and, by extension, investors. The recast historical financial information for Q1 2018, FY 2017, and FY 2016, presented in Exhibit 99.1, allows for a consistent comparison of performance under the new segment structure. Investors should note that this filing does not involve a restatement of consolidated financial statements but rather a reclassification for internal reporting and external disclosure purposes. The updated segment structure emphasizes the increasing importance of software and integrated services to Motorola Solutions' overall business strategy.

Key Highlights

1Motorola Solutions has restructured its reporting segments from "Products" and "Services" to "Products and Systems Integration" and "Services and Software."
2The change is driven by a desire to better align financial reporting with executive analysis and to reflect growth from recent acquisitions in the Services and Software segment.
3Systems Integration revenue and costs are now part of the "Products and Systems Integration" segment.
4Software-related revenue and costs have been moved to the new "Services and Software" segment.
5Recast historical financial information for Q1 2018, FY 2017, and FY 2016 is provided to facilitate comparison under the new segment structure.
6The recast information is available on both GAAP and Non-GAAP bases.
7This is a change in reporting and does not involve a restatement of the company's consolidated financial statements.

Motorola Solutions, Inc. 8-K Report, Regulation FD Disclosure (Aug 2, 2018)

Summary

Key Highlights

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