Press release·03/03/2025 04:25:00

Overview of Motorola Solutions’ Financial Performance

Motorola Solutions, a leading provider of mission-critical communications and analytics solutions, reported strong financial results for 2024. The company’s net sales reached $10.8 billion, an 8% increase from the previous year. This growth was driven by robust performance across both the Products and Systems Integration segment and the Software and Services segment.

The Products and Systems Integration segment, which includes the company’s video, LMR (land mobile radio) communications, and other hardware offerings, saw a 10% increase in net sales to $6.9 billion. This was fueled by growth in both the North America and International regions. The Software and Services segment, which encompasses the company’s software, cloud, and managed services solutions, also grew 5% to $3.9 billion.

Motorola Solutions’ operating earnings increased 17% to $2.7 billion, reflecting improved profitability in both business segments. Gross margins expanded to 51.0% of net sales, up from 49.8% in the prior year, driven by higher sales, favorable product mix, and lower direct material costs.

The company’s net earnings attributable to Motorola Solutions, Inc. were $1.6 billion, or $9.23 per diluted common share, compared to $1.7 billion, or $9.93 per diluted common share, in the previous year. The decrease in net earnings was primarily due to a $585 million loss on the extinguishment of the Silver Lake Convertible Debt, which was partially offset by higher operating earnings.

Segment Performance Highlights

The Products and Systems Integration segment saw a 10% increase in net sales, driven by growth in both LMR and Video solutions. Operating earnings for this segment increased to $1.7 billion, with operating margins expanding to 24.3% from 19.9% in the prior year. This improvement was attributed to higher sales, favorable product mix, and operational efficiencies, partially offset by higher employee incentive costs and legal expenses.

In the Software and Services segment, net sales grew 5%, with strong performance in Video and Command Center solutions offsetting a decline in LMR services due to the impact of the Charge Control on the Airwave contract. Operating earnings for this segment were $1.0 billion, with operating margins decreasing to 25.7% from 28.1% in the previous year. The margin decline was driven by the Airwave revenue reduction, higher employee incentive costs, and increased expenses related to acquired businesses and legal matters, partially offset by lower intangible amortization expenses.

Recent Events and Acquisitions

Motorola Solutions faced several notable events and developments during the year:

• The company’s Airwave private mobile radio communications network in the U.K. was subject to a price control imposed by the Competition and Markets Authority (CMA). This resulted in a reduction in revenue from the Airwave contract, which was partially offset by a contract extension from the U.K. Home Office.

• Motorola Solutions made several strategic acquisitions to bolster its capabilities in the Command Center, Video Security and Access Control, and LMR Communications domains. These include the acquisitions of 3tc Software, Noggin, an unnamed vehicle location and management solutions business, Silent Sentinel, IPVideo, Rave Mobile, Futurecom, and Barrett Communications, among others.

• The company repurchased the $1.0 billion aggregate principal amount of the Silver Lake Convertible Debt, incurring a $585 million loss on the extinguishment. To fund this repurchase, Motorola Solutions issued $400 million of 5.0% senior notes due 2029 and $900 million of 5.4% senior notes due 2034.

Outlook and Growth Opportunities

Looking ahead, Motorola Solutions sees continued growth opportunities across its business segments:

• In LMR, the company expects the global installed base to expand as customers recognize the importance of secure and reliable communications, particularly in the wake of natural disasters and large-scale incidents. The integration of LMR with broadband solutions is also expected to drive growth.

• Within the Command Center portfolio, Motorola Solutions anticipates increased demand for its cloud-native, hybrid, and on-premises software solutions that support the public safety workflow from “911 call to case closure.” The adoption of Next Generation 911 Core Services (NGCS) is also expected to contribute to growth in this segment.

• In Video, the company expects to see continued expansion of its fixed and mobile video security solutions, driven by the increasing adoption of cloud-based access control and the growing demand for video analytics that provide actionable insights.

• The company also sees opportunities to integrate its LMR, Video, and Command Center technologies into a unified safety and security ecosystem, as customers increasingly seek cloud-based, integrated solutions.

Financial Position and Capital Allocation

Motorola Solutions maintained a strong financial position in 2024, with $2.1 billion in cash and cash equivalents and $6.0 billion in outstanding long-term debt. The company’s operating cash flow increased to $2.4 billion, up from $2.0 billion in the previous year.

During the year, Motorola Solutions returned $898 million to shareholders through $654 million in dividends and $244 million in share repurchases. The company also increased its quarterly dividend by 11% to $1.09 per share.

Looking ahead, the company believes it has adequate internal resources to fund its expected working capital, capital expenditures, and cash requirements for the next twelve months and the foreseeable future. Motorola Solutions plans to continue investing in its existing products and technologies, pursuing strategic acquisitions, and returning capital to shareholders through dividends and share repurchases.

Conclusion

Motorola Solutions delivered a strong financial performance in 2024, with growth across both its business segments and improved profitability. The company’s strategic investments in acquisitions, product development, and the integration of its technology offerings position it well to capitalize on the evolving needs of its government, public safety, and enterprise customers. While facing some challenges related to the Airwave contract in the U.K., Motorola Solutions’ diversified business model and robust financial position provide a solid foundation for continued success in the years to come.