Motorola Solutions, Inc. and Subsidiaries Non-GAAP Trends
(In millions, except for per share amounts)
| Q1 '23 | Q2 '23 | Q3 '23 | Q4 '23 | Q1 '24 | Q2 '24 | Q3 '24 | Q4 '24 | Q1 '25 | Q2 '25 | |
|---|---|---|---|---|---|---|---|---|---|---|
| Net sales | $ 2,171 | $ 2,403 | $ 2,556 | $ 2,848 | $ 2,389 | $ 2,628 | $ 2,790 | $ 3,010 | $ 2,528 | $ 2,765 |
| GAAP gross margin | 1,046 | 1,189 | 1,280 | 1,455 | 1,192 | 1,339 | 1,433 | 1,548 | 1,300 | 1,413 |
| Non-GAAP gross margin adjustments: | ||||||||||
| Share-based compensation expenses | 10 | 10 | 10 | 10 | 11 | 12 | 12 | 13 | 14 | 14 |
| Reorganization of business charges | 6 | (3) | 2 | 2 | 3 | 2 | 7 | 5 | 6 | |
| Non-GAAP gross margin | 1,062 | 1,196 | 1,292 | 1,467 | 1,206 | 1,351 | 1,447 | 1,568 | 1,319 | 1,433 |
| GAAP Operating earnings ("OE") | 399 | 518 | 639 | 738 | 519 | 644 | 711 | 814 | 582 | 692 |
| Non-GAAP OE Adjustments: | ||||||||||
| Share-based compensation expenses | 45 | 43 | 42 | 42 | 45 | 51 | 49 | 50 | 52 | 60 |
| Reorganization of business charges | 7 | 6 | 4 | 5 | 7 | 4 | 5 | 10 | 12 | 8 |
| Intangible assets amortization expense | 55 | 43 | 39 | 40 | 39 | 36 | 38 | 39 | 37 | 39 |
| Other highlighted items* | 10 | 24 | 5 | 33 | 14 | 11 | 13 | (17) | 14 | (1) |
| Non-GAAP OE | $ 532 | $ 641 | $ 741 | $ 870 | $ 638 | $ 758 | $ 830 | $ 916 | $ 716 | $ 818 |
| GAAP OE % | 18.4 % | 21.6 % | 25.0 % | 25.9 % | 21.7 % | 24.5 % | 25.5 % | 27.0 % | 23.0 % | 25.0 % |
| Non-GAAP Adj % | 6.1 % | 5.1 % | 4.0 % | 4.6 % | 5.0 % | 4.3 % | 4.2 % | 3.4 % | 5.3 % | 4.6 % |
| Non-GAAP OE % | 24.5 % | 26.7 % | 29.0 % | 30.5 % | 26.7 % | 28.8 % | 29.7 % | 30.4 % | 28.3 % | 29.6 % |
| GAAP Other income (expense) | (41) | (31) | (47) | (31) | (609) | (64) | (16) | (27) | (35) | (12) |
| Non-GAAP below OE highlighted items* | (2) | 13 | (15) | — | (591) | (31) | 8 | (1) | 6 | 16 |
| Non-GAAP Other income (expense) | (39) | (44) | (32) | (31) | (18) | (33) | (24) | (26) | (29) | (28) |
| GAAP Net earnings (loss) attributable to Motorola Solutions, Inc. | 278 | 371 | 464 | 595 | (39) | 443 | 562 | 611 | 430 | 513 |
| Non-GAAP above OE highlighted items* | 133 | 123 | 102 | 132 | 119 | 114 | 119 | 102 | 134 | 126 |
| Non-GAAP below OE highlighted items* | 2 | (13) | 15 | — | 591 | 31 | (8) | 1 | 6 | (16) |
| Non-GAAP tax adjustments and effect | (29) | (23) | (34) | (59) | (189) | (36) | (34) | (21) | (30) | (21) |
| TOTAL Non-GAAP Earnings attributable to Motorola Solutions, Inc. | $ 384 | $ 458 | $ 547 | $ 668 | $ 482 | $ 552 | $ 639 | $ 693 | $ 540 | $ 602 |
| GAAP attributable to Motorola Solutions, Inc. earnings (loss) per share ("EPS") | $ 1.61 | $ 2.15 | $ 2.70 | $ 3.47 | $ (0.23) | $ 2.60 | $ 3.29 | $ 3.56 | $ 2.53 | $ 3.04 |
| Non-GAAP attributable to Motorola Solutions, Inc. EPS adjustments* | 0.61 | 0.50 | 0.49 | 0.43 | 3.04 | 0.64 | 0.45 | 0.48 | 0.65 | 0.53 |
| Non-GAAP attributable to Motorola Solutions, Inc. EPS | $ 2.22 | $ 2.65 | $ 3.19 | $ 3.90 | $ 2.81 | $ 3.24 | $ 3.74 | $ 4.04 | $ 3.18 | $ 3.57 |
| Diluted weighted average shares outstanding** | 172.6 | 172.6 | 171.7 | 171.5 | 171.3 | 170.3 | 170.9 | 171.4 | 169.8 | 168.8 |
*Highlighted items: The company has excluded the effects of highlighted items including, but not limited to, acquisition-related transaction fees, tangible and intangible asset impairments, reorganization of business charges, certain non-cash pension adjustments, legal settlements and other contingencies, gains and losses on investments and businesses, Hytera-related legal expenses, gains and losses on the extinguishment of debt and the income tax effects of significant tax matters, from its non-GAAP operating expenses and net income measurements because the company believes that these historical items do not reflect expected future operating earnings or expenses and do not contribute to a meaningful evaluation of the company's current operating performance or comparisons to the company's past operating performance. For the purposes of management's internal analysis over operating performance, the company uses financial statements that exclude highlighted items, as these charges do not contribute to a meaningful evaluation of the company's current operating performance or comparisons to the company's past operating performance.
**Under U.S. GAAP, the accounting for a net loss from continuing operations results in the presentation of diluted earnings per share equal to basic earnings per share, as any increase in basic shares would be anti-dilutive to earnings per share. As a result of the highlighted items identified during Q1 2024, the Company reported a net loss from continuing operations for the three months ended March 30, 2024 within our GAAP Condensed Consolidated Statement of Operations, while reporting earnings on a non-GAAP basis over the same periods. Dilutive shares of 171.3 million represent the dilutive share count that the Company would have reported in the quarter, if not for the loss per share driven by the highlighted items in the quarter.
