Motorola Solutions (MSI -0.38%) is a leader in public safety and enterprise security, offering products and services such as land mobile radio (LMR) communications, video security, and command center software. On February 13, 2025, the company reported its fourth-quarter earnings for 2024, surpassing expectations.
It reported a Non-GAAP EPS of $4.04 against the $3.89 estimate, and revenues of $3.01 billion versus the $2.993 billion forecast. This performance signals a successful quarter for the company, marked by significant revenue growth in key segments.
| Metric | Q4 2024 | Q4 Estimate | Q4 2023 | Y/Y Change |
|---|---|---|---|---|
| Non-GAAP EPS | $4.04 | $3.89 | $3.90 | 3.6% |
| Revenue | $3.01B | $2.99B | $2.85B | 5.7% |
| GAAP Operating Margin | 27.0% | N/A | 25.9% | 1.1 pp |
| Ending Backlog | $14.7B | N/A | $14.3B | 3.1% |
Source: SEC filings. Analyst estimates for the quarter provided by FactSet. PP = percentage points.
Overview of Motorola Solutions' Business
Motorola Solutions is a global leader providing mission-critical communications and analytics. Its key technological areas include LMR, video security, and command center software. These core offerings cater to public safety agencies and enterprises, facilitating reliable and integrated communication solutions.
The company consistently focuses on technological diversification and integration, which are critical for maintaining its competitive edge. It underscores growth through innovations like video analytics and acquisitions such as Theatro, enhancing product capabilities. Success in these areas depends on expanding government contracts and achieving operational excellence.
Quarter in Review
Diving into the fourth quarter's performance, Motorola Solutions reported substantial revenues of $3.01 billion, a slight beat over the projected $2.99 billion. The Software and Services segment was pivotal, achieving an 11% growth driven by increased orders and renewals in LMR networks and command centers.
The Products and Systems Integration segment also showcased solid growth with a 3% increase, fueled by demand for LMR and video security products. Overall, the company reported $816 million in GAAP operating earnings, marking a 10% year-over-year increase.
A notable one-time adjustment was the non-GAAP EPS, which saw a 4% increase, heavily boosted by share-based compensation and amortization adjustments. Amid legal and compliance challenges with the U.K. Home Office, the company's strategy of gaining long-term government contracts remains a stable yet risky revenue source.
On the dividend front, consistent payouts were maintained compared to the previous quarter. Payouts rose 12% year over year..
Looking Ahead
Looking forward to Q1 2025, Motorola predicts a 5.0% to 5.5% revenue growth and projects a Non-GAAP EPS range of $2.98 to $3.03. This forecast accounts for expected currency exchange challenges and a non-GAAP tax rate of about 21%.
For the full year 2025, revenue is anticipated to rise by approximately 5.5%. Investors should monitor changes in forward guidance, as well as external factors like regulatory adjustments from the U.K. Home Office contract that could impact future financials. Continued focus on diversified technological offerings appears to be key in maintaining its growth trajectory.
