Motorola Solutions, Inc. Q4 FY2024 earnings call

• Overall Business: Q4 was an exceptional quarter with record revenue in both segments, record operating earnings, and a record backlog of $14.7 billion. Full-year results were outstanding with Products and SI revenue up 10% and Software and Services revenue up 5% (13% excluding UK Home Office). The company made four acquisitions in video and command center technologies and announced the acquisition of Theatro. - Segment Specifics: Products and SI had notable wins like large P25 device and system orders. Software and Services had strong growth in video command center and LMR services outside the US. Backlog details: Q4 ending backlog was $14.7 billion, up $438 million, with Software and Services backlog increasing significantly due to strong demand in all technologies.

Products and SI Segment: Q4 sales were up 3% driven by growth in LMR and video. Revenue from acquisitions was $11 million in the quarter while the impact of favorable foreign currency rates was $1 million. Operating earnings were $594 million or 30.5% of sales, up from 30% in the prior year. Full-year Products and SI revenue was $6.9 billion, up 10% from the prior year. Software and Services Segment: Q4 revenue was up 11% driven by growth in all three technologies. Revenue from acquisitions was $26 million while the impact of favorable foreign currency rates was $5 million. Q4 operating earnings in this segment were $322 million and operating margins were 30.3% of sales. Full-year SNS revenue was $3.9 billion, up 5% compared to last year (excluding UK Home Office, up 13%).

• Q1 sales expected to be up between 5% and 5.5% with non-GAAP EPS between $2.98 and $3.03 per share. - Full-year revenue growth expected to be approximately 5.5% inclusive of $120 million of FX headwinds. - Non-GAAP earnings per share expected between $14.64 and $14.74 per share. - Expect to generate $2.7 billion in operating cash flow, aiming for third consecutive year of double-digit operating cash flow growth. - Technology growth expectations: Video planning for 10%-12% growth inclusive of cloud adoption, Command Center 12% growth, LMR low to mid-single-digit growth.

• Forward-looking statements subject to various risks and uncertainties. Factors include those in the 2023 annual report on Form 10-K, quarterly reports on Form 10-Q, and other SEC filings. Risks involve currency headwinds, tariff impacts, and supply chain issues that could affect financial results.

Q: Alyssa Shreves asked about Trump administration impact on customer behavior and video growth excluding cloud.

A: Greg Brown said no impact on customer behavior and views cloud adoption as a favorable trend for video growth.

Q: Mary asked about federal budget approval, Ukraine revenue, and video engagement.

A: Greg Brown stated no Ukraine revenue expectation for 2025, highlighted positive federal engagement in video and DOD, DOJ, DHS opportunities.

Q: Joseph Cardoso inquired about Theatro acquisition and tariff impact.

A: Jason Winkler said Theatro acquisition will be small, part of command center offer; Jason Winkler discussed flexible supply chain and tariff navigation.

Q: Keith Housum asked about Theatro capabilities and tariff context.

A: Jason Winkler and Mahesh Saptharishi discussed Theatro's AI and frontline worker solutions; Jason Winkler talked about flexible footprint and tariff monitoring.

Q: Louie DiPalma asked about AI in LMR and video security.

A: Mahesh Saptharishi discussed AI in edge video platforms and LMR radio products, including background noise cancellation and audio codec improvement.

Q: Tomer Zilberman asked about video security product trends and backlog.

A: Jason Winkler talked about video product growth and backlog mix including quick turn orders.