MSI Earning Date, Transcript Summary & Report

Record Q1 Performance: Q1 was an excellent start to the year with record first quarter revenue, record operating earnings, and record cash flow.

Software Sales Increase: In Software and Services, sales were up 9%, driven by strong adoption of software applications across our safety and security ecosystem and by our LMR services.

Sales and Margin Expansion: In products and SI, sales were up 4%, with significant operating margin expansion driven by growth for higher tiered public safety devices and lower material costs.

Video and Software Investments: Investments in video and software continue to drive meaningful revenue growth, with Command Center and Video Technologies both growing double digits and achieving record Q1 orders and ending backlog.

Strategic Acquisitions for Growth: Closed acquisitions of RapidDeploy and Theatro, enhancing Software offerings for public safety and enterprise customers.

Innovative Public Safety Technologies: Launched SVX and Assist, groundbreaking technologies that will transform public safety operations.

Q1 Revenue Growth Highlights: Q1 revenue grew 6% and was above guidance, with growth in all three technologies despite FX headwinds.

Operating Earnings Increase: GAAP operating earnings were $582 million, or 23% of sales, up from 21.7% in the year-ago quarter; non-GAAP operating earnings were $716 million, up 12% from the year-ago quarter.

Non-GAAP EPS Increase: Non-GAAP EPS was $3.18, up 13% from $2.81 last year, driven by higher sales and margins.

Cash Flow Improvement: Q1 operating cash flow was $510 million, up $128 million versus last year, and free cash flow was $473 million, up $137 million.

Share Repurchases and Dividends: Capital allocation included $325 million in share repurchases and $182 million in cash dividends.

Backlog Growth in Software: Ending backlog for Q1 was $14.1 billion, with strong growth across all three technologies within Software and Services.

Sales and Revenue Growth: Expect Q2 sales growth of approximately 4% and full year revenue growth of 5.5%.

Credit Facility Renewal: Successfully renewed and extended $2.25 billion revolving credit facility with improved pricing and flexibility.

International Revenue Decline: Revenue growth in international markets was down 3% compared to last year, indicating challenges in global sales performance.

Backlog Decrease Impact: The ending backlog decreased by $306 million or 2% versus last year, suggesting potential issues in future revenue generation.

Backlog Decline Analysis: Sequentially, backlog was down $605 million or 4%, indicating a decline in orders and potential future sales.

Operating Expense Increase: Operating expenses increased by $35 million compared to last year, which could impact profitability if not managed effectively.

Tariff Cost Impact: Tariff-related costs are estimated to be up to $100 million this year, which could negatively affect overall financial performance.

Software Segment Profitability Decline: Operating earnings in the Software and Services segment decreased from 29.8% to 28.7% of sales, indicating a decline in profitability in that area.