Jason J. Winkler
Executive Vice President and Chief Financial Officer at Motorola Solutions
Thanks, Greg. Revenue for the quarter grew 6% and was above our guidance with growth in both segments and all three technologies. Revenue from acquisitions was $37 million and the impact of favorable foreign currency rates was $6 million. GAAP operating earnings were $814 million or 27% of sales, up from 25.9% in the year-ago quarter, driven primarily by a recovery related to the litigation. Non-GAAP operating earnings were $916 million, up 5% from the year-ago quarter and non-GAAP operating margin was 30.4% versus 30.5% in the year-ago quarter. GAAP earnings per share was $3.56, up from $3.47 in the year-ago quarter. Non-GAAP EPS was $4.04, up 4% from $3.90 last year, driven by higher sales and favorable mix. OpEx in Q4 was $652 million, up $55 million versus the prior year, primarily due to higher employee incentives, investments in video and higher expenses from acquisitions. For the full-year 2024, revenue was $10.8 billion, up 8% with strong growth in both segments and across all three technologies. Revenue from acquisitions was $95 million and the impact of unfavorable foreign currency rates was $2 million. GAAP operating earnings were $2.7 billion or 24.8% of sales versus 23% in the prior year. Non-GAAP operating earnings were $3.1 billion, up $358 million and non-GAAP operating margins were 29% of sales, up from 27.9% of sales in the prior year, driven by higher sales, favorable mix and lower direct material costs, partially offset by the airwave charge control and the impact of acquisitions. GAAP earnings per share was $9.23, down from $9.93 in the prior year, primarily due to the $3.42 per share pre-tax loss booked in Q1 related to the accounting treatment for the settlement of the Silver Lake convertible notes. Non-GAAP EPS was $13.84, up 16% from $11.95 in 2023, driven primarily by higher earnings. For the full-year, OpEx was $2.4 billion, up $197 million versus 2023, primarily driven by higher employee incentives, higher expenses associated with acquisitions and higher legal costs, inclusive of the CMA appeal. And the effective tax-rate for 2024 was 22% compared to 21.9% in the prior year. Turning to cash-flow, Q4 operating cash-flow was $1.1 billion, down from $1.2 billion in the prior year as the linearity of cash generation improved and resulted in-full year record operating cash-flow of $2.4 billion and record free-cash flow of $2.1 billion. The 17% year-over-year operating cash-flow increase was driven by higher earnings and marks the second consecutive year of double-digit operating cash-flow growth. Capital allocation in '24 included $654 million in dividends, $282 million for acquisitions, $244 million in share repurchases and $257 million of capex. We also used $593 million of cash to settle the Silverlake convertible premium in Q1 and increased our dividend by 11% in November, which was our 14th consecutive year of double-digit increases. Moving to segment results and products, Q4 sales were up 3% versus last year, 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, driven by higher sales, favorable mix and lower direct material costs. Some notable wins and achievements in this segment include a $53 million P25 device order from a US state and local customer, a $52 million P25 system and device order for a Canadian customer, a $36 million P25 device order for Broward Sheriff's Office in Florida, a $33 million P25 system order from the Kentucky State Police, a $32 million P25 device order for the City of Phoenix, Police and Fire and a $16 million fixed video order for Duke Energy. And for the full-year, products and SI revenue was $6.9 billion, up 10% from the prior year, driven by higher sales in LMR and video. Revenue from acquisitions was $43 million and the impact of unfavorable foreign currency rates was $2 million. Full-year operating earnings were $1.9 billion or 28.1% of sales, up from 24.3% in the prior year-on higher sales, favorable mix and lower direct material costs. In software and services, 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, down from 31.6% last year, primarily driven by acquisitions. Some notable Q4 highlights in this segment include a $329 million 10-year services renewal for Melbourne, Australia's LMR network as $160 million five-year LMR managed services renewal from Norway's nationwide public safety network, a $68 million LMR services order for a US state and local customer, a $40 million command center order from the Scottish Fire services and finally, a $16 million fixed video order for the Sao Paulo state government in Brazil. For the full-year, SNS revenue was $3.9 billion, up 5% compared to last year. When excluding the UK Home Office, revenue grew 13% with the growth in all three technologies. Revenue from acquisitions was $52 million during the year. Full-year operating earnings were $1.2 billion or 30.8% of sales, down 310 basis-points versus the prior year, driven by the airwave charge control and higher expenses associated with acquired businesses during the year. Looking at regional results, North-America revenue was $2.2 billion in Q4, up 9% and $7.8 billion for the full-year, up 13%, driven by growth in both segments and in all three technologies. International Q4 revenue was $807 million, down 3% versus last year, primarily driven by lower Ukraine revenue in the current year and our exit from ESN, which was in the year-ago quarter, offset by growth in video and command center. For the full-year, international revenue was $3 billion, down 2%. Excluding the UK home office, international revenue was up mid-single digits, driven by growth in all three technologies. Moving next to backlog. Ending backlog for Q4 was $14.7 billion, up $438 million versus last year, inclusive of $226 million of foreign currency headwinds. Sequentially, backlog was up $602 million, inclusive of $319 million of foreign currency headwinds. And in the Products and SI segment, ending backlog was down $858 million, driven primarily by strong LMR shipments during the year. Sequentially, backlog was down $46 million, primarily driven by unfavorable FX. In software and services, backlog increased $1.3 billion from last year and $648 million sequentially. The growth was driven by strong demand in all three technologies, inclusive of foreign currency headwinds of $195 million year-over-year and $281 million sequentially. Turning next to our outlook. We expect Q1 sales to be up between 5% and 5.5% with non-GAAP EPS between $2.98 and $3.03 per share. This assumes approximately $25 million in foreign-exchange headwinds, 170 million, 171 million diluted shares and a non-GAAP effective tax-rate of approximately 21%. And for the full-year, we expect revenue growth of approximately 5.5%, inclusive of our expectations for $120 million of FX headwinds driven by the US dollar strength over the last few months and for non-GAAP earnings per share between $14.64 and $14.74 per share. The full-year outlook also assumes 171 million shares and a non-GAAP effective tax-rate of approximately 23%. Additionally, the outlook assumes tariff rates that are in effect today. And finally, we -- with respect to cash-flow, we expect to generate $2.7 billion in OCF, which we would expect make 2025 our third consecutive year of double-digit operating cash-flow growth. And before I turn it over to Greg, I wanted to share just a few other things. First, with the UK home office headwinds behind us on a full-year basis and the strong momentum we are seeing in cloud adoption and SaaS, we expect our S&S segment growth to be high-single-digits or double-digits when normalized for FX. And on the product segment, we are expecting low-to mid-single-digit growth coming off a record 2024. Secondly, I would provide you with some color on the technology growth expectations as well. In video, we're planning for another strong year of approximately 10% to 12% growth, inclusive of the increased cloud adoption we're seeing from our customers, in Command Center, we're planning for 12% growth driven in-part by continued strong adoption for our SaaS offerings there. And in LMR, we expect low-to mid-single digit growth, inclusive of the majority of the FX headwinds that I mentioned earlier. And finally, I'd highlight the strength of our balance sheet, which includes over $2 billion in cash at year end, a fixed-rate debt maturity profile with no significant maturities until 2028 and a solid investment-grade credit rating, all of which gives us significant flexibility in capital allocation. Greg, I'd like to turn it back to you.
