Motorola Solutions highlights renewed LMR strength, growth in video, command-center arenas

Motorola Solutions officials yesterday reported earnings for 2022 that featured strength in its land-mobile-radio (LMR), video-security and command-center businesses, as well as projections of even more growth this year amid an environment bolstered by significant federal funding that can be used to purchase its products.

Motorola Solutions CEO Greg Brown described 2022 as “a phenomenal year for the company,” which achieved double-digit growth for the second consecutive, fueled by record sales of LMR, video security and command-center technologies.

Brown also expressed optimism for the upcoming year, noting the company’s record year-end $14.3 billion backlog—a figure that increased almost $800 million when compared to the previous year—and an encouraging economic outlook buoyed by multiple federal grant programs helping fund purchases.

“As I look to 2023, our record backlog position, coupled with a robust funding environment, positions us well for another year of strong revenue and earnings growth,” Brown said during the company’s quarterly conference call with industry analysts.

Within the land-mobile-radio (LMR) arena in 2022, Motorola Solutions continued to secure significant contracts for its APX NEXT portfolio of public-safety-grade P25 devices that also leverage LTE connectivity, which expands functionality and greatly simplifies customers’ processes for updating software.

In addition, Motorola Solutions saw its professional and commercial radio (PCR) business—a unit hit hard by COVID-19 restrictions and supply-chain issues for components in 2020—rebound to pre-pandemic performance levels, topping $1 billion in revenue during 2022, according to Brown.

“I think it’s a statement about the strength and durability of land mobile radio, first and foremost, as a platform– LMR versus an LTE or cellular alternative,” Brown said.

“[LMR] is a need-to-have, not a nice-to-have. That’s not just a slogan; that’s a reality. And the demand for LMR writ large and the platforms and the feature functionality that comes with that—not to mention the integration to the command center and things like video security and access control—are powering this technology forward.”

Despite these PCR gains, Motorola Solutions has decided to alter its go-to-market strategy in a portion of the space to a license-centric model, according to CFO Jason Winkler.

“First, in order to further optimize our supply chain, we have moved the lowest part of PCR, which is sold to small businesses and some consumers, to a licensed model with a third-party manufacturer,” Winkler said during the call with analysts. “As a result of this change, we will only recognize revenues equal to the margin from the product.

“In addition, we made a decision to exit some PCR markets in Asia. We expect these changes together to constitute an $80 million headwinds to our … 2023 revenues.”

Complementing Motorola Solutions’ LMR strength in 2022 were even greater growth rates in its video-security and command-center businesses—units that have been bolstered significantly by a series of acquisitions in recent years.

Brown cited the role that acquisitions have played in Motorola Solutions’ growth and product diversification, highlighting the recent purchase of Rave Mobile Safety.

“Our acquisition of Rave Mobile Safety during Q4 was our seventh acquisition last year,” Brown said. “Rave adds approximately $70 million of annual recurring revenue for 2023 and expands the company’s addressable market by approximately $7 billion. Whether it’s a student or a teacher alerting public safety with the push of a button. or 911 call takers coordinating a more informed response, Rave Mobile Safety amplifies the connection between our video-security and command-center portfolios.

“Since 2015, we’ve invested almost $6 billion in acquiring companies that have helped us create a broad set of public safety and enterprise security solutions. These assets have helped to accelerate our revenue growth, diversify the composition of our revenue streams, and more than quadrupled our addressable market to what we now estimate to be $60 billion.”

Somewhat offsetting the optimism of Motorola Solutions’ officials about the company’s 2022 performance is the fact that the Competition and Markets Authority (CMA) has stated that it plans to release the final decision from its investigation into the Motorola Solutions-owned Airwave TETRA network used by UK first responders.

In its provisional decision that was released in October, the CMA proposed pricing regulations that would slash about $1 billion from the Airwave revenue that Motorola Solutions would receive under the current four-year contract that was signed in late 2021 with the UK Home Office. Since then, the UK Home Office has asked that an additional $600 million be recovered from Motorola Solutions.

Brown said he is not sure whether the CMA will issue its final decision this month or in March, but he reiterated Motorola Solutions’ position that the investigation and preliminary decision are “disproportionate … unprecedented [and] overreaching.”

In a related matter, the UK Home Office last month announced that Motorola Solutions is no longer one of the vendors charged with the development of the Emergency Services Network (ESN)—the much-delayed, LTE-based public-safety broadband network that is supposed to replace Airwave. Motorola Solutions will provide “termination-assisting services” associated with the ESN for 12 months ending in December—a fact confirmed by Brown.