NYSE$MSI

Motorola Solutions, Inc. · Q3 2023 earnings

Q3 2023 earnings · · Investor relations

Briefing

Motorola Solutions reported strong Q3 2023 results, with record third-quarter revenue, earnings, and cash flow, leading the company to raise its full-year revenue and earnings outlook.

Motorola Solutions reported an 8% increase in sales, reaching $2.6 billion, driven by growth in both Software and Services (up 12%) and Products and Systems Integration (up 5%). GAAP EPS increased by 66% to $2.70, while non-GAAP EPS rose by 6% to $3.19. The company's operating cash flow increased to $714 million, and it achieved a record Q3 ending backlog of $14.3 billion.

  • Sales increased by 8% year-over-year to $2.6 billion, with Software and Services up 12% and Products and Systems Integration up 5%.
  • GAAP EPS increased by 66% year-over-year to $2.70, and non-GAAP EPS increased by 6% year-over-year to $3.19.
  • Operating cash flow increased to $714 million, up from $388 million in the year-ago quarter.
  • Record Q3 ending backlog of $14.3 billion, up 6% year-over-year.

Headline financials

Total Revenue

$2.56B

Previous: $2.37B+7.7%
EPS (adj)

$3.19

Previous: $3.00+6.3%
GAAP Operating Margin

25.0%

Previous: 15.7%+59.2%
GAAP Effective Tax Rate

21.5%

Previous: 15.9%+35.2%
Ending Backlog

$14.3B

No prior period
Capital Expenditures

-$65M

No prior period
Free Cash Flow

$464M

Previous: $279M+66.3%
Net Income

$464M

Previous: $279M+66.3%
Operating Income

$639M

Previous: $373M+71.3%
Gross Profit

$1.28B

Previous: $1.03B+24.2%
Cash & Equivalents

$910M

Previous: $822M+10.7%
Total Assets

$12.4B

Previous: $11.6B+7.0%
R&D Expense

$215M

No prior period
Stock-Based Comp

$52M

Previous: $45M+15.6%

Revenue & EPS history

Motorola · Revenue · Quarterly

$2.56B

Q3 2023+7.7%vs Q3 2022
Beat estimate in 8 of 15 quarters(53%)
ActualEstimate

Revenue by segment

Motorola · $2.56B total across 2 segments · Q3 2023

  • Products & Systems Integration
    $1.61B+5.4%
  • Software & Services
    $944M+11.8%

Forward guidance

The company expects revenue growth of approximately 4% for the fourth quarter of 2023, compared to the fourth quarter of 2022. The company expects non-GAAP EPS in the range of $3.60 to $3.65 per share. For the full year 2023, the company now expects revenue in the range of $9.930 billion to $9.945 billion, and non-GAAP EPS of between $11.65 and $11.70 per share.

Tailwinds

  • Revenue growth of approximately 4% is expected for Q4 2023.
  • Non-GAAP EPS is projected to be in the range of $3.60 to $3.65 per share for Q4 2023.
  • Full-year 2023 revenue is expected to be in the range of $9.930 billion to $9.945 billion.
  • Full-year 2023 non-GAAP EPS is projected to be between $11.65 and $11.70 per share.
  • Anticipated benefits from pricing adjustments to mitigate inflationary pressures.

Headwinds

  • Assumes approximately 171 million fully diluted shares for Q4 2023.
  • Assumes a non-GAAP effective tax rate of approximately 24% for Q4 2023.
  • Assumes approximately $40 million in foreign exchange headwinds for full year 2023.
  • Assumes approximately 172 million fully diluted shares for full year 2023.
  • Assumes a non-GAAP effective tax rate of approximately 23% for full year 2023.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q3 2023

Historical avgQ3 2023

+0.9%

Avg return

Earnings day

+1.6%

Avg return

5 days after

+4.2%

Avg return

30 days after

59%

43 / 73 earnings

Positive

+12.4%

Q4 2018

Best reaction

-9.3%

Q3 2025

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026-1.1%-8.7%-5.2%
Q4 2025+7.7%+8.7%+12.3%
Q3 2025-9.3%-8.7%-14.4%
Q2 2025+1.9%+5.6%+7.6%
Q1 2025-7.6%-5.5%-5.4%
Q4 2024-6.0%-5.8%-10.3%
Q3 2024+7.6%+6.0%+4.4%
Q2 2024+2.9%+1.0%+10.8%
Q1 2024+5.3%+6.6%+8.6%
Q4 2023+0.9%-2.7%+2.3%
Q3 2023+6.7%+8.7%+16.0%
Q2 2023-3.1%-3.4%-1.4%
Q1 2023-2.4%-0.7%-2.0%
Q4 2022+5.2%+4.8%+1.3%
Q3 2022+6.2%+7.0%+13.7%
Q2 2022+4.9%+4.5%+2.2%
Q1 2022+6.6%+5.7%+3.6%
Q4 2021-6.1%-9.6%-6.2%
Q3 2021-2.1%-1.3%-1.8%
Q2 2021+2.6%+3.1%+9.9%
Q1 2021+7.2%+8.6%+13.0%
Q4 2020+1.5%+2.1%-0.3%
Q3 2020-3.9%+0.9%+5.5%
Q2 2020+4.3%+3.3%+10.6%
Q1 2020-3.0%-3.0%+15.2%
Q4 2019+1.6%+4.4%-0.4%
Q3 2019+1.0%-2.5%+1.5%
Q2 2019+2.5%+3.4%+9.0%
Q1 2019+0.6%-0.7%+5.1%
Q4 2018+12.4%+13.9%+15.3%
Q3 2018+5.1%+2.7%+7.1%
Q2 2018-2.7%+0.1%+6.2%
Q1 2018+0.4%+0.2%+1.4%
Q4 2017+4.4%+3.3%+6.9%
Q3 2017+4.1%+1.7%+2.7%
Q2 2017-0.1%-2.0%-2.8%
Q1 2017-2.2%-1.9%+0.3%
Q4 2016+2.0%-3.4%+0.6%
Q3 2016+6.1%+9.8%+11.1%
Q2 2016+6.1%+7.2%+12.5%
Q1 2016-5.0%
Q4 2015+7.2%
Q3 2015-5.5%
Q2 2015+5.9%
Q1 2015+2.4%
Q4 2014-0.0%
Q3 2014-0.3%
Q2 2014-4.5%
Q1 2014+3.0%
Q4 2013-2.6%
Q3 2013+3.4%
Q2 2013+0.7%
Q1 2013-8.7%
Q4 2012+0.9%
Q3 2012+0.5%
Q2 2012+4.8%
Q1 2012-0.0%
Q4 2011+3.0%
Q3 2011+3.6%
Q2 2011+1.3%
Q1 2011-0.2%
Q4 2010-2.3%
Q3 2010+0.4%
Q2 2010-0.7%
Q1 2009-3.2%
Q1 2010+1.4%
Q4 2009-0.6%
Q3 2009+2.5%
Q3 2008+2.5%
Q2 2009-2.5%
Q2 2008-2.5%
Q4 2007-2.5%
Q4 2008-2.5%

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