Executive Summary

Q4 delivered record revenue of $3.01B (+6% y/y) and non‑GAAP EPS of $4.04 (+4% y/y); GAAP EPS was $3.56 (+3% y/y). Backlog ended at a record $14.7B (+$438M y/y), positioning for continued growth .
Segment mix was healthy: Products & Systems Integration (PSI) sales +3% y/y and Software & Services (S&S) +11% y/y; Q4 non‑GAAP operating margin was 30.4% (PSI 30.5%, S&S 30.3%). Non‑GAAP margin ticked down ~10 bps y/y on acquisitions, partially offset by mix and lower direct materials .
FY25 outlook: revenue growth ~5.5% with non‑GAAP EPS $14.64–$14.74; Q1’25 revenue +5.0%–5.5% and non‑GAAP EPS $2.98–$3.03. Assumes ~$120M FY FX headwind, 171M diluted shares, and non‑GAAP tax rate ~23% (Q1 tax ~21%) .
Cash generation remained a strength: Q4 operating cash flow $1.07B (FCF $983M); FY24 record OCF $2.4B (+17% y/y) and FCF $2.1B (+19% y/y) .
Stock reaction catalysts: resilient demand in LMR/video/command center, FedRAMP High authorization supporting federal momentum, accretive ecosystem M&A (RapidDeploy, Theatro, 3tc), and backlog‑led visibility; offset by U.K. Home Office constraints, FX/tariff headwinds, and slight S&S margin compression .

What Went Well and What Went Wrong

What Went Well
- “Record sales, operating earnings and cash flow” in 2024 with robust demand across LMR, video, and command center; backlog at a record $14.7B (+$438M y/y) .
- Q4 came in above company guidance on revenue with both segments and all three technologies growing; non‑GAAP EPS +4% y/y on higher sales and favorable mix .
- Strong cash generation (Q4 OCF $1.07B; FY OCF $2.4B) and healthy balance sheet (>$2B cash at year‑end) bolster capital allocation flexibility .
- CEO: “Strong demand for our safety and security solutions, together with our record backlog, positions us well for another year of strong growth” .
What Went Wrong
- S&S non‑GAAP margin modestly down y/y (30.3% vs 31.6%) on acquisitions; group non‑GAAP operating margin down ~10 bps y/y (30.4% vs 30.5%) .
- Q4 cash flow down y/y (OCF $1.07B vs $1.25B; FCF $983M vs $1.16B) on working capital timing and higher tax/interest payments .
- U.K. Home Office headwinds persisted (Airwave Charge Control), with appeal avenues narrowed; class action filed Dec 2024; litigation continues into 2025 .

Financial Results

Revenue, EPS, and Margins

Metric	Q2 2024	Q3 2024	Q4 2024
Revenue ($USD Billions)	$2.628	$2.790	$3.010
GAAP Diluted EPS ($)	$2.60	$3.29	$3.56
Non-GAAP EPS ($)	$3.24	$3.74	$4.04
GAAP Operating Margin (%)	24.5%	25.5%	27.0%
Non-GAAP Operating Margin (%)	28.8%	29.7%	30.4%

Segment Performance

Segment	Q2 2024 Sales ($B)	Q3 2024 Sales ($B)	Q4 2024 Sales ($B)	Q2’24 Non-GAAP Op Margin (%)	Q3’24 Non-GAAP Op Margin (%)	Q4’24 Non-GAAP Op Margin (%)
Products & Systems Integration	1.658	1.784	1.949	26.8%	29.3%	30.5%
Software & Services	0.970	1.006	1.061	32.3%	30.6%	30.3%

KPIs

KPI	Q2 2024	Q3 2024	Q4 2024
Ending Backlog ($B)	$14.0	$14.1	$14.7
Operating Cash Flow ($B)	$0.180	$0.759	$1.070
Free Cash Flow ($B)	$0.112	$0.702	$0.983

Non‑GAAP adjustments context: Q4 non‑GAAP EPS excludes ~$0.48/sh of highlighted items (e.g., share‑based comp, amortization); includes a $(0.36)/sh Hytera gain and $0.18/sh Hytera legal expense .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue Growth	Q1 2025	—	+5.0% to +5.5%	New
Non‑GAAP EPS ($)	Q1 2025	—	$2.98–$3.03	New (assumes ~$25M FX headwind; ~171M diluted shares; ~21% non‑GAAP tax)
Revenue Growth	FY 2025	—	~+5.5%	New (assumes ~$120M FX headwind)
Non‑GAAP EPS ($)	FY 2025	—	$14.64–$14.74	New (assumes ~171M shares; ~23% non‑GAAP tax)
Operating Cash Flow ($B)	FY 2025	—	~$2.7	New (call disclosure)
FY24 Non‑GAAP EPS ($)	FY 2024	$13.63–$13.68 (as of Q3)	Actual $13.84	Beat vs guide
FY24 Revenue Growth	FY 2024	~8.25% (as of Q3)	Actual Sales $10.817B (8% y/y)	In line/slightly below growth guide; revenue dollars delivered

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 & Q2)	Current Period (Q4)	Trend
AI / Cloud adoption	Video software +24% in Q2; cloud adoption accelerating (planned ~$40M headwind from prem‑to‑cloud) . Q3 continued cloud/software momentum .	Planning ~10–12% Video growth in 2025 “even with” cloud smoothing revenue; strong SaaS in Command Center (plan ~12% growth) .	Positive, cloud mix rising.
Supply chain & PPV	Q2: supplier lead times improved faster than expected; FY benefit ~$70M PPV/semis .	FY24 PPV benefit $65–$70M; planning ~$25M PPV tailwind in FY25 .	Tailwind moderating.
Tariffs / Macro	Q2: Fed/state funding supportive; backlog/pipeline up ~$1B y/y .	Guide reflects current tariffs; flexible footprint (Mexico/Malaysia/Canada) limits impact; China not a risk (301 tariffs) .	Manageable risk.
Federal & State demand	Q2: strong state/local backdrop; multi‑year LMR refresh, APX NEXT adoption .	FedRAMP High for federal cloud; federal video engagement outpacing company average; ~$550M 2024 government video; state/local still “as good” as past years .	Strengthening, policy tailwinds.
U.K. Home Office	Q2/Q3: Airwave Charge Control pressuring S&S; backlog adjusted for 2029 extension; appeal pending .	Court of Appeal denied permission; High Court hearing on Deferred Shutdown Notice set for Apr 22, 2025; collective proceeding filed Dec 2024 .	Headwind persists.
Product vs software mix in Video	Video products mid‑single growth while software/cloud faster (Q2/Q3) .	Q4 video products ticked up; software still growing faster over 2024 .	Balanced; software mix rising.

Management Commentary

“2024 marked another exceptional year for the company, with record sales, operating earnings and cash flow.” — Greg Brown, Chairman & CEO .
“Revenue for the quarter grew 6% and was above our guidance… Non‑GAAP EPS was $4.04, up 4%… driven by higher sales and favorable mix.” — Jason Winkler, CFO .
“As we enter 2025… record backlog and healthy balance sheet positions us well for another year of strong revenue, earnings per share and cash flow growth.” — Greg Brown .
“We expect to generate $2.7B in OCF [in 2025], which… would be our third consecutive year of double‑digit operating cash flow growth.” — Jason Winkler .

Q&A Highlights

Federal demand and policy: Management not seeing customer behavior changes from federal spending shifts; federal video remains a bright spot; FedRAMP High enables broader APX/CommandCentral deployment into agencies .
Ukraine/International: No Ukraine revenue expected in 2025 (vs ~$80M in 2024), contributing to international revenue pressure; North America strong .
Tariffs & footprint: Guide reflects tariffs “in effect today”; footprint (Mexico/Malaysia/Canada) provides flexibility; China exposure minimal; PPV tailwind moderating to ~$25M in 2025 .
Video mix: Q4 saw product growth, but video software outpaced hardware for full year; cloud adoption “favorable” even as it smooths revenue recognition .
Theatro acquisition: Small near‑term revenue; strategic fit for AI/voice workflows for frontline workers; expands Command Center offering .

Estimates Context

Wall Street consensus (S&P Global) for Q4’24 revenue/EPS was unavailable due to access limits at the time of analysis; as a result, we cannot present objective “vs. consensus” deltas for Q4’24. Values from S&P Global were not retrieved due to request‑limit errors.

Key Takeaways for Investors

Demand durability: Broad‑based growth across PSI (+3% y/y) and S&S (+11% y/y) with record backlog ($14.7B) underpins FY25 guide despite FX/tariff headwinds .
Margin quality: Non‑GAAP operating margin expanded sequentially through 2024 (Q2→Q4), with PSI mix and cost tailwinds; S&S margin dipped modestly on acquisitions but remains ~30% .
Cash generation: Q4 OCF $1.07B; FY25 OCF guide ~$2.7B supports continued buybacks, M&A, and R&D—important for multiple expansion support in volatile macro .
Cloud/SaaS flywheel: Rising cloud adoption in Video/Command Center (plus FedRAMP High) increases recurring revenue visibility and federal access; near‑term revenue smoothing offsets by higher durability .
Risk watch‑list: U.K. Airwave constraints, FX headwinds (~$120M FY25), potential tariff expansions; litigation developments (Hytera/UK proceedings) remain non‑operating swing factors .
Ecosystem M&A: RapidDeploy (NG911), Theatro (AI/voice), and 3tc (CAD) deepen integrated safety/security stack—supporting cross‑sell and stickier workflows in 2025+ .
Trading setup: With backlog strength, rising cloud mix, and expanding OCF, narrative skew remains positive; monitor S&S margin recapture, international stabilization ex‑U.K., and tariff policy for upside/ downside catalysts .

Appendices

Non‑GAAP adjustments detail (Q4’24):

After‑tax non‑GAAP EPS adjustments totaled ~$0.48/sh, including share‑based comp ($0.37), intangibles amortization ($0.23), Hytera legal expenses ($0.18), reorg costs ($0.10), M&A fees ($0.04), and Hytera gain (–$0.36), among others .

Select operational disclosures:

Q4 OCF $1.07B vs $1.25B y/y; FCF $983M vs $1.16B y/y on working capital/taxes/interest .
Q4 segment sales: PSI $1.949B (+3% y/y), S&S $1.061B (+11% y/y) .
FY24: Sales $10.817B (+8% y/y), GAAP EPS $9.23, non‑GAAP EPS $13.84; record FCF $2.134B (+19% y/y) .

(End of report)

Motorola Solutions, Inc. (MSI)·Q4 2024 Earnings Summary