Motorola Solutions, Inc. (NYSE: MSI) today reported its earnings results for the third quarter of 2025.

"Our Q3 was outstanding, with record third-quarter revenue, earnings and cash flow,” said Greg Brown, chairman and CEO, Motorola Solutions. “Demand for our safety and security solutions remains robust and our Silvus acquisition is off to a strong start. As a result, we’re again raising our earnings expectations for the year.”

Key Financial Results: 

• Sales of $3.0 billion, up 8% versus a year ago

• Products and Systems Integration sales up 6%

• Software and Services sales up 11%

• GAAP earnings per share ("EPS") of $3.33; up 1% versus a year ago

• Non-GAAP EPS* of $4.06, up 9% versus a year ago

• Record Q3 operating cash flow of $799 million, up $40 million versus a year ago

• Record Q3 ending backlog of $14.6 billion, up $467 million versus a year ago

• Acquired Silvus Technologies ("Silvus") for $4.4 billion

OTHER SELECTED FINANCIAL RESULTS

• Revenue - Sales were $3.0 billion, up 8% from the year-ago quarter driven by growth in North America and International. Revenue from acquisitions was $123 million and foreign currency tailwinds were $21 million in the quarter. The Products and Systems Integration segment grew 6% driven by growth in Mission Critical Networks ("MCN") and Video Security and Access Control ("Video"). The Software and Services segment grew 11% driven by growth in MCN, Command Center and Video.

• Operating margin - GAAP operating margin was 25.6% of sales, up from 25.5% in the year-ago quarter. Non-GAAP operating margin was 30.5% of sales, up 80 basis points from 29.7% in the year-ago quarter. The increase in non-GAAP operating margin was driven by higher sales and improved operating leverage, partially offset by higher tariffs.

• Taxes - The GAAP effective tax rate during the quarter was 22.2%, versus 19.0% in the year-ago quarter driven by non-deductible transaction costs from the Silvus acquisition this quarter and tax benefits from settling foreign tax audits in the year-ago quarter. The non-GAAP effective tax rate was 20.7%, versus 20.6% in the year-ago quarter.

• Cash flow - Operating cash flow was $799 million, compared to $759 million in the year-ago quarter and free cash flow was $733 million, up from $702 million in the year-ago quarter. Both the operating cash flow and free cash flow for the quarter increased primarily due to higher earnings, net of non-cash charges.

• Capital allocation - During the quarter, the company paid $182 million in cash dividends, repurchased $121 million of common stock and incurred $66 million of capital expenditures.  Additionally, the company settled $70 million of 6.5% debentures that were due within the quarter.
  
  During the quarter, the company also closed the acquisition of Silvus for $4.4 billion, which was primarily funded through $2.0 billion of long-term senior notes issued during the second quarter and $1.5 billion of new term loans. The remaining consideration of approximately $900 million was settled through a combination of cash on hand and issuance of commercial paper.  

• Backlog - The company ended the quarter with record Q3 backlog of $14.6 billion, up 3% or $467 million from the year-ago quarter driven by record Q3 orders. Products and Systems Integration segment backlog was down $604 million, or 14%, driven primarily by strong MCN shipments. Software and Services segment backlog was up $1.1 billion, or 11%, driven by strong demand across all three technologies and favorable foreign currency impacts, partially offset by revenue recognition from the U.K. Home Office.

NOTABLE WINS AND ACHIEVEMENTS

Software and Services

• $57 million P25 services order for the State of Louisiana

• $25 million Command Center order for the State of Idaho

• $20 million P25 services order for a U.S. state and local customer

• $14 million mobile video order for the New York State Park Police

• $13 million P25 services order for the Buenos Aires Police

• $10 million mobile video order for the Bulgarian Ministry of Interior

Products and Systems Integration

• $110 million P25 system upgrade for the State of Colorado

• $84 million P25 system upgrade for the Tennessee Department of Safety

• $82 million P25 system upgrade for a U.S. state and local customer

• $40 million P25 device order for a U.S. federal customer

• $14 million P25 device and mobile video order for Arlington, TX

• $10 million Silvus order for a NATO country

BUSINESS OUTLOOK

• Fourth quarter 2025 - The company expects revenue growth of approximately 11% compared to the fourth quarter of 2024 and non-GAAP EPS between $4.30 to $4.36 per share. This assumes approximately 169 million of fully diluted shares and a non-GAAP effective tax rate of approximately 24%.

• Full-year 2025 - The company is maintaining its prior revenue guidance of approximately $11.65 billion or 7.7% growth, and raising non-GAAP EPS guidance to between $15.09 and $15.15 per share, up from its prior guidance of between $14.88 and $14.98 per share. This outlook assumes approximately 169 million of fully diluted shares and a non-GAAP effective tax rate of approximately 22.5%.

The company has not quantitatively reconciled its guidance for forward-looking non-GAAP metrics to their most comparable GAAP measures because the company does not provide specific guidance for the various reconciling items as certain items that impact these measures have not occurred, are out of the company’s control, or cannot be reasonably predicted. Accordingly, a reconciliation to the most comparable GAAP financial metric is not available without unreasonable effort. Please note that the unavailable reconciling items could significantly impact the company’s results.

Read the full report here