• Q4 Revenue Growth: 6% growth, above guidance, with contributions from both segments and all three technologies.
• Q4 GAAP Operating Earnings: $814 million, 27% of sales, up from 25.9% in the previous year.
• Q4 Non-GAAP Operating Earnings: $916 million, 30.4% margin, slightly down from 30.5% last year.
• Q4 GAAP EPS: $3.56, up from $3.47 in the previous year.
• Q4 Non-GAAP EPS: $4.04, up 4% from $3.90 last year.
• Q4 Operating Expenses: $652 million, up $55 million year-over-year.
• Full-Year 2024 Revenue: $10.8 billion, up 8%.
• Full-Year GAAP Operating Earnings: $2.7 billion, 24.8% of sales, up from 23% last year.
• Full-Year Non-GAAP Operating Earnings: $3.1 billion, 29% margin, up from 27.9% last year.
• Full-Year GAAP EPS: $9.23, down from $9.93 last year.
• Full-Year Non-GAAP EPS: $13.84, up 16% from $11.95 last year.
• Full-Year Operating Cash Flow: $2.4 billion, up 17% year-over-year.
• Q4 Products & SI Sales: Up 3%, driven by LMR and Video growth.
• Q4 Software & Services Revenue: Up 11%, with growth in all three technologies.
• Q4 North America Revenue: $2.2 billion, up 9%.
• Q4 International Revenue: $807 million, down 3% year-over-year.
• Ending Backlog: $14.7 billion, up $438 million year-over-year.
• 2025 Revenue Growth Outlook: Approximately 5.5% growth expected.
• 2025 Non-GAAP EPS Outlook: Between $14.64 and $14.74 per share.
• 2025 Operating Cash Flow Outlook: Expected to be $2.7 billion.

• Warning! GuruFocus has detected 4 Warning Sign with MSI.

Release Date: February 13, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Motorola Solutions Inc (NYSE:MSI) achieved record revenue in both segments and all three technologies, with double-digit growth in Video and Command Center.
• The company ended the year with a record backlog of $14.7 billion, despite unfavorable currency rates.
• Full-year revenue was up 8%, with strong growth in both segments and across all three technologies.
• Motorola Solutions Inc (NYSE:MSI) increased its dividend by 11%, marking the fourteenth consecutive year of double-digit increases.
• The company expects another year of strong revenue, earnings per share, and cash flow growth in 2025, supported by robust demand and a healthy balance sheet.

Negative Points

• GAAP earnings per share decreased from $9.93 to $9.23 due to a pre-tax loss related to the settlement of the Silver Lake convertible notes.
• Operating expenses increased by $197 million for the full year, driven by higher employee incentives, acquisition expenses, and legal costs.
• International revenue declined by 2% for the full year, primarily due to lower revenue from Ukraine and the exit from ESN.
• The Software & Services segment saw a decline in operating margins by 310 basis points due to the Airwave Charge Control and higher expenses from acquisitions.
• The company faces $120 million in foreign exchange headwinds for the full year 2025, impacting revenue growth expectations.

Q & A Highlights

Q: Are you seeing any impact from recent federal spending shifts and the DOGE initiative on customer behavior or deployment timing? A: Greg Brown, CEO: No, we are not seeing any changes in customer behavior due to the DOGE initiative. We view the government's focus on reducing wasteful spending as positive, but it hasn't affected our customers' actions.

Q: How is the cloud adoption affecting the growth rate for your Video segment? A: Greg Brown, CEO: We are pleased with the cloud adoption trend, which is smoothing revenue recognition. Despite this shift, we are still achieving double-digit growth of 10% to 12% in the Video segment, indicating strong momentum.

Q: What are your expectations for federal budget approval and any potential upside from immigration efforts or Ukraine revenue? A: Greg Brown, CEO: We do not expect any revenue from Ukraine this year, as most of last year's revenue was from PCR. Our engagement with federal agencies like DOJ, DHS, and DOD remains strong, and we recently received FedRAMP high classification, opening new opportunities.

Q: Can you provide more details on the Theatro acquisition and its potential impact? A: Jason Winkler, CFO: Theatro's revenue contribution will be small this year, but its AI and voice-powered communication technology for frontline workers is promising. Mahesh Saptharishi, CTO, adds that Theatro's solutions are optimized for frontline workflows, particularly in retail, and have potential for expansion into other markets.

Q: How is the local and state spending environment in the US, and how does it compare to previous years? A: Jack Molloy, EVP Products & Sales: The state and local spending environment remains strong, driven by urban public safety technology prioritization and robust funding from income, sales, and property taxes. The environment is as favorable as it was two years ago.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.