Motorola Solutions(MSI)2025-05-01 20:12Financial Performance - Q1 2025 sales reached $2.528 billion, a 6% increase from Q1 2024[2] - GAAP operating earnings were $582 million, up 12% year-over-year, with an operating margin of 23.0%[4] - Non-GAAP EPS increased by 13% to $3.18, compared to $2.81 in Q1 2024[3] - Operating cash flow for Q1 2025 was a record $510 million, up $128 million from the previous year[3] - Net sales increased to $2,528 million for the three months ended March 29, 2025, compared to $2,389 million for the same period in 2024, representing an increase of 5.8%[34] - Gross margin improved to 51.4% in Q1 2025, up from 49.9% in Q1 2024, indicating enhanced profitability[34] - Operating earnings rose to $582 million, a 12.1% increase from $519 million in the prior year[34] - Net earnings attributable to Motorola Solutions, Inc. reached $430 million, a significant recovery from a loss of $39 million in the same quarter last year[34] - Free cash flow for the quarter was $473 million, compared to $336 million in Q1 2024, reflecting strong cash generation[40] - The non-GAAP net earnings attributable to Motorola Solutions, Inc. was $540 million, compared to $482 million in Q1 2024, showing strong operational performance[41] - Net earnings attributable to Motorola Solutions, Inc. for the three months ended March 29, 2025, were $2.53 per share, a significant increase from a loss of $(0.23) per share in the same period last year[46] Revenue Growth Projections - The company expects approximately 4% revenue growth for Q2 2025 compared to Q2 2024[9] - Full-year 2025 revenue growth is projected at approximately 5.5%, with non-GAAP EPS guidance between $14.64 and $14.74[9] - Organic revenue growth was 4%, with organic revenue totaling $2.496 billion compared to $2.389 billion in the previous year[52] Legal Matters - Hytera was ordered to pay $56 million in royalties on September 1, 2023, following a court ruling related to the use of stolen trade secrets[22] - The total damages awarded to the company by the Court of Appeals amounted to $407.4 million, including exemplary damages, under the Defend Trade Secrets Act[23] - The District Court's award of $136.3 million in copyright infringement damages is currently under reconsideration[23] - The company recognized a gain of approximately $61 million from the release of escrow funds on November 26, 2024, related to Hytera litigation[22] - Hytera made a partial payment of approximately $10 million toward the judgment on March 4, 2025, which was also recorded as a gain[22] - Legal expenses associated with Hytera-related litigation are no longer considered "normal and recurring" by the company as of 2020[26] - The company anticipates further legal expenses related to Hytera litigation, which will be excluded from non-GAAP operating income[26] Cost and Tax Considerations - The GAAP effective tax rate for Q1 2025 was 21.0%, significantly down from 57.8% in the prior year[4] - The non-GAAP tax rate for the quarter was 21.1%, slightly lower than 22.1% in the same period last year[43] - The company anticipates increased costs on materials and components in 2025 due to global supply chain volatility[8] Shareholder and Compensation Information - Share-based compensation expenses are excluded from non-GAAP operating expenses and net income measurements due to their non-cash nature[27] - Intangible assets amortization expense is excluded from non-GAAP operating expenses as it is a non-cash expense and affects performance evaluation[28] - Share-based compensation expenses increased to $0.39 per share from $0.32 per share year-over-year[46] - The company reported a total of 169.8 million diluted weighted average common shares for the current quarter, compared to 166.3 million in the prior year[46] - The company incurred $0.08 per share in Hytera-related legal expenses, up from $0.01 per share in the same quarter last year[46] Operational Metrics - The backlog at the end of Q1 2025 was $14.1 billion, down 2% from the previous year[4] - Research and development expenditures increased to $233 million, up from $218 million year-over-year, highlighting continued investment in innovation[34] - Total assets decreased to $14,433 million as of March 29, 2025, down from $14,595 million at the end of 2024[36] - The company reported a net cash provided by operating activities of $510 million, compared to $382 million in the previous year[38] - Non-GAAP adjustments before income taxes totaled $0.82 per share, down from $4.14 per share in the same period last year[46] - The operating earnings margin as a percentage of net sales was 23.0% for the current quarter, compared to 21.7% in the prior year[49]