Motorola Solutions Reports Third-Quarter 2026 Financial Results
Company raises full-year revenue and earnings outlook again and increases full- year cash flow expectations • Sales of $3.4 billion, up 12% versus a year ago
• Record ending backlog of $16.6 billion, up 14% versus a year ago, driven by record Q3 orders
• Acquired D-Fend Solutions ("D-Fend"), an industry leader in counter-drone technology
– November 4, 2026 – Motorola Solutions, Inc. (NYSE: MSI) today reported its earnings results for the third quarter of 2026.
“Q3 was another outstanding quarter, with double-digit revenue growth across both segments and all three technologies,” said Greg Brown, chairman and CEO, Motorola Solutions. “We continue to see exceptionally strong demand across our safety and security solutions, driving record Q3 orders and an all-time record ending backlog. As a result, we’re raising our revenue and earnings outlook again and increasing our cash flow expectations for the full year.”
KEY FINANCIAL RESULTS (presented in millions, except per share data and percentages)
* Non-GAAP financial information excludes the after-tax impact of approximately $1.63 per diluted share related to highlighted items, share-based compensation expense and intangible assets amortization expense. Details regarding these non- GAAP adjustments and the use of non-GAAP measures are included later in this news release. 1
- Sales were $3.4 billion, up 12% from the year-ago quarter driven by growth in North America and International. Revenue growth related to acquisitions was $211 million and foreign currency tailwinds were $11 million in the quarter. The Products and Systems Integration segment grew 12% driven by growth in Mission Critical Networks ("MCN") and Video Security and Access Control ("Video"). The Software and Services segment grew 13% driven by growth in MCN, Command Center and Video.
- GAAP operating margin was 23.0% of sales, down from 25.6% in the year-ago quarter primarily driven by an increase to the contingent Silvus earnout in the current quarter due to strong performance of the business. Non-GAAP operating margin was 32.5% of sales, up 200 basis points from 30.5% in the year-ago quarter driven by higher sales and improved operating leverage, partially offset by higher supply chain costs.
- The GAAP effective tax rate during the quarter was 24.2%, versus 22.2% in the year-ago quarter and the non-GAAP effective tax rate was 21.8%, versus 20.7% in the year-ago quarter. The increases in the GAAP and non-GAAP effective tax rates were primarily driven by lower benefits from share-based compensation recognized in the current quarter.
- Operating cash flow was $662 million, compared to $799 million in the year-ago quarter and free cash flow was $589 million, compared to $733 million in the year-ago quarter. Both the operating cash flow and free cash flow for the quarter decreased due to higher tax and interest payments during the quarter, primarily offset by higher earnings, net of non-cash charges.
- During the quarter, the company paid $200 million in cash dividends, repurchased $94 million of common stock at an average price of $457.07 and invested $73 million in capital expenditures. Additionally, the company announced a $2 billion increase to the share repurchase authorization during the quarter.
The company also closed the acquisition of D-Fend during the quarter for $1.3 billion, net of cash acquired, which was primarily funded through $950 million of new long-term senior notes. The company also issued a new $300 million 364-day term loan and repaid $300 million of the 364-day term loan issued for the Silvus acquisition, upon its maturity during the quarter.
In addition, the company acquired DeepNeuronic, a provider of AI software that turns live camera feeds into real-time operational insights, for $29 million, net of cash acquired.
- The company ended the quarter with record backlog of $16.6 billion, up 14% or $2.1 billion from the year-ago quarter driven by record Q3 orders in all three technologies. Products and Systems Integration segment backlog was up $635 million, or 18%, driven primarily by strong demand in MCN and Video. Software and Services segment backlog was up $1.4 billion, or 13%, driven by strong demand in all three technologies. 2
• $63 million P25 system and device order for the Metro Government of Nashville and Davidson County
• $139 million ten-year P25 services, mobile video and Command Center order for the State of Louisiana
• $51 million computer aided dispatch and records management order for the Los Angeles Police Dept
- The company expects revenue growth of approximately 13% compared to the fourth quarter of 2025 and non-GAAP EPS between $5.47 and $5.52 per share. This assumes approximately 168 million of fully diluted shares and a non-GAAP effective tax rate of approximately 22.5%.
- The company now expects revenue of approximately $13.050 billion, up from its prior guidance of $12.975 billion and non-GAAP EPS between $17.94 and $17.99 per share, up from its prior guidance of between $17.62 and $17.72 per share. This outlook assumes approximately 168 million of fully diluted shares and a non-GAAP effective tax rate between 21.5% and 22%.
In addition, the company is increasing its operating cash flow expectations to $3.050 billion for the full year.
The company has not quantitatively reconciled its guidance for forward-looking non-GAAP measurements in this news release to their most comparable GAAP measurements because the company does not provide specific guidance for the various reconciling items as certain items that impact these measurements have not occurred, are out of the company’s control, or cannot be reasonably predicted. Accordingly, a reconciliation to the most comparable GAAP financial measurement is not available without unreasonable effort. Please note that the unavailable reconciling items could significantly impact the company’s results. 3
The global trade landscape continues to shift rapidly, including evolving tariffs and import/export regulations, such as restrictions around rare earth minerals, trade barriers and trade disputes.
On February 20, 2026, a U.S. Supreme Court ruling invalidated tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”). On April 20, 2026, the U.S. Customs and Border Protection launched a system to process IEEPA tariff refund claims. Following the implementation of this system, the company determined that the recovery of a portion of these refunds is now probable. Accordingly, during the nine months ended October 3, 2026, the company recognized a favorable adjustment of approximately $70 million recorded within Cost of sales in its Condensed Consolidated Statements of Operations.
In addition, the company is experiencing higher costs for memory in its products which is a result of substantial demand in the market driven by AI. As a result, the company continues to observe elevated volatility and uncertainty around the global supply chain. The company engages with global suppliers across a diverse network of locations around the world. The company is actively managing its inventory and continues to work with its global supply base to mitigate its exposure to elevated volatility and uncertainty from these rising memory costs, as well as global tariffs and import/export regulations that have developed, and which may continue to develop, to ensure supply continues at levels necessary to meet its current customer demand. The company expects inventory levels to remain elevated as it mitigates this dynamic supply chain environment. The current environment has led to increased costs on materials and components, for which the company continues to develop mitigation actions going forward.
Motorola Solutions will host its quarterly conference call beginning at 4 p.m. U.S. Central Time (5 p.m. U.S. Eastern Time) on Wednesday, November 4. The conference call will be webcast live at www.motorolasolutions.com/investors. An archive of the webcast will be available for a limited period of time thereafter.
Q3 2026 Q3 2025 Net sales $3,376 $3,009 Gross margin $1,768 $1,554 Operating earnings $777 $770 Amounts attributable to Motorola Solutions, Inc. common stockholders Net earnings $512 $562 Diluted EPS $3.06 $3.33 Weighted average diluted common shares 167.4 169.0 outstanding
In addition to the results presented in accordance with accounting principles generally accepted in the U.S. ("GAAP") included in this news release, Motorola Solutions also has included non-GAAP measurements of results, including free cash flow, non-GAAP operating earnings, non-GAAP EPS, non-GAAP operating margin, non-GAAP net earnings attributable to MSI, non-GAAP tax rate, and organic revenue. The company has provided these non-GAAP measurements to help investors better understand its core operating performance, enhance comparisons of core operating performance from period-to-period and allow better comparisons of its operating performance to that of its competitors. Among other things, management uses these operating results, excluding the identified items, to evaluate the performance of its businesses and to evaluate results relative to certain incentive compensation targets. Management uses operating results excluding these items because it believes these measurements enable it to make better period-to-period evaluations of the financial performance of its core business operations. The non-GAAP measurements are intended only as a supplement to the comparable GAAP measurements and the company compensates for the limitations inherent in the use of non-GAAP measurements by using GAAP measures in conjunction with the non-GAAP measurements. As a result, investors should consider these non-GAAP measurements in addition to, and not in substitution for or as superior to, GAAP measurements.
Reconciliations: Details and reconciliations of such non-GAAP measurements to the corresponding GAAP measurements can be found at the end of this news release.
Free cash flow: Free cash flow represents net cash provided by operating activities less capital expenditures. The company believes that free cash flow is useful to investors as the basis for comparing its performance and coverage ratios with other companies in the company's industries, although the company's measure of free cash flow may not be directly comparable to similar measures used by other companies. This measure is also used as a component of incentive compensation.
Organic Revenue: Organic revenue reflects net sales calculated under GAAP excluding net sales from acquired business owned for less than four full quarters. The company believes organic revenue provides useful information for evaluating the periodic growth of the business on a consistent basis and provides for a meaningful period-to-period comparison and analysis of trends in the business.
Non-GAAP operating earnings, non-GAAP EPS, non-GAAP operating margin and non- GAAP net earnings attributable to MSI each excludes highlighted items, including share-based compensation expenses and intangible assets amortization expense, as follows:
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, adjustments to contingent earnout, 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.
Hytera-Related Legal Expenses: In 2017, the company filed a complaint against Hytera Communications Corporation Limited of Shenzhen, China; Hytera America, Inc.; and Hytera Communications America (West), Inc. (collectively, "Hytera"), in the U.S. District Court for the Northern District of Illinois (the "District Court"), alleging trade secret theft and copyright infringement, and seeking injunctive relief. In 5 2020, a jury decided in the company's favor, ultimately resulting in an award to the company of $543.7 million, plus $51.1 million in pre-judgment interest and $2.6 million in costs, as well as $34.2 million in attorneys' fees.
In 2024, after both parties appealed to the U.S. Court of Appeals for the Seventh Circuit (the "Court of Appeals"), the Court of Appeals, among other items, affirmed the District Court's award of $407.4 million in damages under the Defend Trade Secrets Act, and directed the District Court to recalculate and reduce its award of $136.3 million in copyright infringement damages, which remains subject to ruling by the District Court. As of October 3, 2026, as a result of this civil litigation and 2020 bankruptcy proceedings by Hytera America, Inc. and Hytera Communications America (West), Inc., Hytera had paid $245 million against this award, $73 million of which was paid in the first nine months of 2026. These payments were recorded as a gain within Other charges within the Consolidated Statement of Operations.
Further, in 2022, the District Court ordered Hytera to pay the company a forward-looking reasonable royalty on Hytera’s products (“I-Series”) that use the company’s stolen trade secrets, applicable to I-Series products sold from July 1, 2019 forward. In 2024, the company received royalties of $61 million related to the I-Series products, which was recorded as a gain within Other charges within the Consolidated Statement of Operations. Beginning in 2025, a favorable ruling in a related legal proceeding in the District Court (which Hytera has subsequently appealed to the Court of Appeals) also ordered Hytera to pay the company for Hytera’s continued use of the company’s trade secrets and copyrighted source code in Hytera’s currently shipping products (“H-Series”), and Hytera has subsequently reported to the company approximately $116 million in royalties subject to the Court's order. While several aspects of the court proceedings related to the H-Series are subject to appeal, the company continues to seek collection of the amounts owed by Hytera through the ongoing legal process.
Management typically considers legal expenses associated with defending the company's intellectual property as “normal and recurring.” Since 2020, the company has believed that Hytera-related legal expenses have not been part of its “normal and recurring” legal expenses incurred to operate its business and has accordingly excluded such expenses from its GAAP operating Income. In addition, as any contingent or actual gains associated with the Hytera litigation are recognized, they will be similarly excluded from the company's non-GAAP operating income, consistent with the company's treatment of the approximately $15 million realized in 2022, $61 million realized in 2024, $157 million realized in 2025, and $73 million realized in the first nine months of 2026. The company believes after the jury award, the presentation of excluding both Hytera-related legal expenses and gains related to awards better aligns with how management evaluates the company's ongoing underlying business performance.
Share-based compensation expenses: The company has excluded share-based compensation expense from its non-GAAP operating expenses and net income measurements. Although share-based compensation is a key incentive offered to the company’s employees and the company believes such compensation contributed to the revenue earned during the periods presented and also believes it will contribute to the generation of future period revenues, the company continues to evaluate its performance excluding share-based compensation expense primarily because it represents a significant non-cash expense. Share-based compensation expense will recur in future periods.
Intangible assets amortization expense: The company has excluded intangible assets amortization expense from its non-GAAP operating expenses and net earnings measurements primarily because it represents a non-cash expense and because the company evaluates its performance excluding intangible assets amortization expense. Amortization of intangible assets is consistent in amount and frequency but is significantly affected by the timing and size of the company’s acquisitions. Investors should note that the use of intangible assets contributed to the company’s revenues earned during the periods presented and will contribute to the company’s future period revenues as well. Intangible assets amortization expense will recur in future periods. 6
This news release contains "forward-looking statements" within the meaning of applicable federal securities law. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and generally include words such as “believes,” “expects,” “intends,” “anticipates,” “estimates” and similar expressions. The company can give no assurance that any actual or future results or events discussed in these statements will be achieved. Any forward-looking statements represent the company’s views only as of today and should not be relied upon as representing the company’s views as of any subsequent date. Readers are cautioned that such forward-looking statements are subject to a variety of risks and uncertainties that could cause the company’s actual results to differ materially from the statements contained in this release. Such forward-looking statements include, but are not limited to, Motorola Solutions’ financial outlook for the fourth quarter and full-year of 2026; and the impact of changes in the global trade environment, the dynamic supply chain environment and the memory market on Motorola Solutions' business, and Motorola Solutions' actions in response thereto (including with respect to inventory levels). Motorola Solutions cautions the reader that the risks and uncertainties below, as well as those in Part I Item 1A of Motorola Solutions’ 2025 Annual Report on Form 10-K and in its other SEC filings available for free on the SEC’s website at www.sec.gov and on Motorola Solutions’ website at www.motorolasolutions.com/investors, could cause Motorola Solutions’ actual results to differ materially from those estimated or predicted in the forward-looking statements. Many of these risks and uncertainties cannot be controlled by Motorola Solutions, and factors that may impact forward-looking statements include, but are not limited to: (i) impact of current global economic and political conditions in the markets in which the company operates; (ii) increased areas of risk, increased competition and additional compliance obligations associated with the introduction of new or enhanced products and services in our segments; (iii) challenges relating to the use of artificial intelligence ("AI") in our products and services; (iv) impact of catastrophic events on our business or our customers' or suppliers' business; (v) the effectiveness of our strategic acquisitions, including the integrations of such acquired businesses; (vi) the inability of our products to meet our customers’ expectations or regulatory or industry standards, or actual or perceived systems or service failures of our products and services; (vii) our inability to purchase a sufficient amount of materials, parts, and components, as well as software and services, at acceptable prices to meet the demands of our customers, and any disruption to our suppliers or significant increase in the price of supplies; (viii) risks related to our large, multi-year system and services contracts; (ix) the global nature of our employees, customers, suppliers and outsource partners; (x) our use of third-parties to develop, design and/or manufacture many of our components and some of our products, and to perform portions of our business operations; (xi) the inability of our subcontractors to perform in a timely and compliant manner or adhere to our Human Rights Policy; (xii) inability to attract and retain senior management and key employees; (xiii) evolving and sometimes conflicting expectations from investors, customers, lawmakers, regulators and other stakeholders regarding social and sustainability considerations and disclosures; (xiv) challenges relating to existing or future legislation and regulations pertaining to AI, AI- enabled products and the use of biometrics and other video analytics; (xv) the impact, including increased costs and potential liabilities, associated with changes in laws and regulations regarding cybersecurity, privacy, data protection, data sovereignty and information security; (xvi) the impact of government regulation of radio frequencies; (xvii) regulations, laws and other compliance requirements and risks applicable to our U.S. government customer contracts and grants; (xviii) the impact, including increased costs and additional compliance obligations, associated with existing or future telecommunications-related laws and regulations; (xix) impact of product regulatory and safety, consumer, worker safety and environmental product compliance and remediation laws; (xx) impact of tax matters; (xxi) increased cybersecurity threats, a security breach or other significant disruption of our IT systems or those of our outsource partners, suppliers or customers; (xxii) our inability to protect our intellectual property or potential infringement of intellectual property rights of third parties; (xxiii) risks relating to intellectual property licenses and intellectual property indemnities in our customer and supplier contracts; (xxiv) our license of the MOTOROLA, MOTO, MOTOROLA SOLUTIONS and the Stylized M logo and all derivatives and formatives thereof from Motorola Trademark Holdings, LLC; (xxv) inability to access the capital markets for financing on acceptable terms and conditions; (xxvi) exposure to exchange rate fluctuations on cross-border transactions and the translation of local currency results into U.S. dollars; (xxvii) impact of returns on pension and retirement plan assets and interest rate changes; and (xxviii) the return of capital to shareholders through dividends and/or repurchasing shares. Motorola Solutions undertakes no obligation 7 to publicly update any forward-looking statement or risk factor, whether as a result of new information, future events or otherwise.
The company uses its website as a means of disclosing material, non-public information and for complying with the company's disclosure obligations under Regulation FD. Therefore, the company encourages investors to monitor the Investor Relations page of the company's website at www.motorolasolutions.com/investors, and review the information the company posts on that page.
safer schools, safer hospitals, safer businesses, and ultimately, safer nations.
MOTOROLA, MOTOROLA SOLUTIONS and the Stylized M Logo are trademarks or registered trademarks of Motorola Trademark Holdings, LLC and are used under license. All other trademarks are the property of their respective owners. ©2026 Motorola Solutions, Inc. All rights reserved. 8
Three Months September 27, Ended October 3, 2026 2025 ────────────────────────────────────────────────────────────────────────────── Net sales from $ 1,999 $ 1,751 products Net sales from 1,377 1,258 services Net sales 3,376 3,009 Costs of 800 728 products sales Costs of 808 727 services sales Costs of sales 1,608 1,455 Gross margin 1,768 1,554 Selling, general and 504 485 administrative expenses Research and development 276 237 expenditures Other charges 114 -4 (income) Intangibles 97 66 amortization Operating 777 770 earnings Other income (expense): Interest -107 -86 expense, net Other, net 8 41 Total other -99 -45 expense Net earnings before income 678 725 taxes Income tax 164 161 expense Net earnings 514 564 Less: Earnings attributable to 2 2 non-controlli… interests Net earnings attributable to Motorola $ 512 $ 562 Solutions, Inc. Earnings per common share: Basic $ 3.09 $ 3.37 Diluted $ 3.06 $ 3.33 Weighted average common shares outstanding: Basic 165.5 166.6 Diluted 167.4 169.0 Percentage of Net Sales* Net sales from 59.2 % 58.2 % products Net sales from 40.8 % 41.8 % services Net sales 100.0 % 100.0 % Costs of 40.0 % 41.6 % products sales Costs of 58.7 % 57.8 % services sales Costs of sales 47.6 % 48.4 % Gross margin 52.4 % 51.6 % Selling, general and 14.9 % 16.1 % administrative expenses Research and development 8.2 % 7.9 % expenditures Other charges 3.4 % -0.1 % (income) Intangibles 2.9 % 2.2 % amortization Operating 23.0 % 25.6 % earnings Other income (expense): Interest -3.2 % -2.9 % expense, net Other, net 0.2 % 1.4 % Total other -2.9 % -1.5 % expense Net earnings before income 20.1 % 24.1 % taxes Income tax 4.9 % 5.4 % expense Net earnings 15.2 % 18.7 % Less: Earnings attributable to 0.1 % 0.1 % non-controlli… interests Net earnings attributable to Motorola 15.2 % 18.7 % Solutions, Inc. * Percentages may not add up due to rounding
Nine Months September 27, Ended October 3, 2026 2025 ────────────────────────────────────────────────────────────────────────────── Net sales from $ 5,298 $ 4,731 products Net sales from 3,925 3,571 services Net sales 9,223 8,302 Costs of 2,130 1,948 products sales Costs of 2,285 2,087 services sales Costs of sales 4,415 4,035 Gross margin 4,808 4,267 Selling, general and 1,439 1,371 administrative expenses Research and development 788 700 expenditures Other charges 188 10 Intangibles 282 142 amortization Operating 2,111 2,044 earnings Other income (expense): Interest -315 -192 expense, net Other, net 64 100 Total other -251 -92 expense Net earnings before income 1,860 1,952 taxes Income tax 420 442 expense Net earnings 1,440 1,510 Less: Earnings attributable to 5 5 non-controlli… interests Net earnings attributable to Motorola $ 1,435 $ 1,505 Solutions, Inc. Earnings per common share: Basic $ 8.66 $ 9.02 Diluted $ 8.57 $ 8.89 Weighted average common shares outstanding: Basic 165.7 166.8 Diluted 167.5 169.2 Percentage of Net Sales* Net sales from 57.4 % 57.0 % products Net sales from 42.6 % 43.0 % services Net sales 100.0 % 100.0 % Costs of 40.2 % 41.2 % products sales Costs of 58.2 % 58.4 % services sales Costs of sales 47.9 % 48.6 % Gross margin 52.1 % 51.4 % Selling, general and 15.6 % 16.5 % administrative expenses Research and development 8.5 % 8.4 % expenditures Other charges 2.0 % 0.1 % (income) Intangibles 3.1 % 1.7 % amortization Operating 22.9 % 24.6 % earnings Other income (expense): Interest -3.4 % -2.3 % expense, net Other, net 0.7 % 1.2 % Total other -2.7 % -1.1 % expense Net earnings before income 20.2 % 23.5 % taxes Income tax 4.6 % 5.3 % expense Net earnings 15.6 % 18.2 % Less: Earnings attributable to 0.1 % 0.1 % non-controlli… interests Net earnings attributable to Motorola 15.6 % 18.1 % Solutions, Inc. * Percentages may not add up due to rounding
October 3, 2026 December 31, 2025 ────────────────────────────────────────────────────────────────────────────── Assets Cash and cash equivalents $ 774 $ 1,165 Accounts receivable, net 2,441 2,200 Contract assets 1,535 1,574 Inventories, net 1,511 983 Other current assets 452 378 Total current assets 6,713 6,300 Property, plant and equipment, 1,203 1,165 net Operating lease assets 534 581 Investments 292 187 Deferred income taxes 697 761 Goodwill 7,666 6,800 Intangible assets, net 3,502 3,104 Other assets 534 491 Total assets $ 21,141 $ 19,389 Liabilities and Stockholders' Equity Short-term borrowings $ 750 $ 749 Accounts payable 1,049 1,134 Contract liabilities 2,481 2,265 Accrued liabilities 1,839 1,930 Total current liabilities 6,119 6,078 Long-term debt 9,361 8,413 Operating lease liabilities 409 471 Other liabilities 2,166 2,000 Total Motorola Solutions, Inc. 3,069 2,410 stockholders’ equity Non-controlling interests 17 17 Total liabilities and stockholders’ $ 21,141 $ 19,389 equity
Three Months September 27, Ended October 3, 2026 2025 ────────────────────────────────────────────────────────────────────────────── Operating Net earnings $ 514 $ 564 Adjustments to reconcile Net earnings to Net cash provided by operating activities: Depreciation and 150 115 amortization Contingent earnout 87 — adjustment Non-cash other 10 1 charges Share-based compensation 103 73 expenses Changes in assets and liabilities, net of effects of acquisitions, dispositions, and foreign currency translation adjustments:
Accounts -263 -128 receivable Inventories -148 -23 Other current assets and -33 -108 contract assets Accounts payable, accrued 47 175 liabilities and contract liabilities Other assets 157 52 and liabilities Deferred income 38 78 taxes Net cash provided by 662 799 operating activities Investing Acquisitions and -1,363 -4,370 investments, net Proceeds from sales of 2 2 investments and businesses, net Capital -73 -66 expenditures Net cash used for investing -1,434 -4,434 activities Financing Net proceeds from issuance 942 750 of debt Net proceeds from short-term 435 923 borrowings Repayments of -300 -70 short-term debt Issuances of common stock, 54 32 net of tax Purchases of -94 -121 common stock Payments of -200 -182 dividends Payments of dividends to -1 -1 non-controlling interests Net cash provided by 836 1,331 financing activities Effect of exchange rate changes on — -8 total cash and cash equivalents Net increase (decrease) in total cash 64 -2,312 and cash equivalents Cash and cash equivalents, 710 3,206 beginning of period Cash and cash equivalents, $ 774 $ 894 end of period
September 27, Nine Months Ended October 3, 2026 2025 ────────────────────────────────────────────────────────────────────────────── Operating Net earnings $ 1,440 $ 1,510 Adjustments to reconcile Net earnings to Net cash provided by operating activities: Depreciation and 441 282 amortization Contingent earnout 178 — adjustment Non-cash other charges 10 -4 (income) Share-based compensation 307 213 expenses Changes in assets and liabilities, net of effects of acquisitions, dispositions, and foreign currency translation adjustments:
Accounts -227 1 receivable Inventories -503 -107 Other current assets and -24 -230 contract assets Accounts payable, accrued -161 -280 liabilities and contract liabilities Other assets 73 101 and liabilities Deferred income 48 95 taxes Net cash provided by 1,582 1,581 operating activities Investing Acquisitions and -1,587 -4,835 investments, net Proceeds from sales of 8 14 investments and businesses, net Capital -190 -151 expenditures Proceeds from sales of 1 — property, plant and equipment Net cash used for investing -1,768 -4,972 activities Financing Net proceeds from issuance 942 2,733 of debt Net proceeds from short-term 500 923 borrowings Repayments of -500 -322 short-term debt Revolving credit facility — -5 renewal fees Issuances of common stock, 45 -3 net of tax Purchases of -543 -664 common stock Payments of -602 -546 dividends Payments of dividends to -5 -5 non-controlling interests Net cash provided by (used for) -163 2,111 financing activities Effect of exchange rate changes on -42 72 total cash and cash equivalents Net decrease in total cash and -391 -1,208 cash equivalents Cash and cash equivalents, 1,165 2,102 beginning of period Cash and cash equivalents, $ 774 $ 894 end of period
Reconciliation of Net Earnings Attributable to MSI to Non-GAAP Net Earnings Attributable to MSI
Reconciliations of Operating Earnings to Non-GAAP Operating Earnings and Operating Margin to Non-GAAP Operating Margin
Reconciliations of Operating Earnings to Non-GAAP Operating Earnings and Operating Margin to Non-GAAP Operating Margin
Full text with the tables
Exhibit 99.1
Motorola Solutions Reports Third-Quarter 2026 Financial Results
Company raises full-year revenue and earnings outlook again and increases full-
year cash flow expectations
• Sales of $3.4 billion, up 12% versus a year ago
◦ Products and Systems Integration sales up 12%
◦ Software and Services sales up 13%
• GAAP earnings per share ("EPS") of $3.06
• Non-GAAP EPS* of $4.69
• Record ending backlog of $16.6 billion, up 14% versus a year ago, driven by
record Q3 orders
• Acquired D-Fend Solutions ("D-Fend"), an industry leader in counter-drone
technology
• Announced $2 billion increase to the share repurchase authorization
CHICAGO
– November 4, 2026 – Motorola Solutions, Inc. (NYSE: MSI) today reported its
earnings results for the third quarter of 2026.
“Q3 was another outstanding quarter, with double-digit revenue growth across
both segments and all three technologies,” said Greg Brown, chairman and CEO,
Motorola Solutions. “We continue to see exceptionally strong demand across our
safety and security solutions, driving record Q3 orders and an all-time record
ending backlog. As a result, we’re raising our revenue and earnings outlook
again and increasing our cash flow expectations for the full year.”
KEY FINANCIAL RESULTS (presented in millions, except per share data and
percentages)
Q3 2026 Q3 2025 % Change
Sales $3,376 $3,009 12 %
GAAP
Operating Earnings $777 $770 1 %
% of Sales 23.0 % 25.6 %
EPS $3.06 $3.33 -8 %
Non-GAAP*
Operating Earnings $1,096 $918 19 %
% of Sales 32.5 % 30.5 %
EPS $4.69 $4.06 16 %
Products and Systems
Integration Segment
Sales $2,118 $1,897 12 %
GAAP Operating Earnings $446 $458 -3 %
% of Sales 21.1 % 24.1 %
Non-GAAP*Operating $671 $555 21 %
Earnings
% of Sales 31.7 % 29.3 %
Software and Services
Segment
Sales $1,258 $1,112 13 %
GAAP Operating Earnings $331 $312 6 %
% of Sales 26.3 % 28.1 %
Non-GAAP*Operating $425 $363 17 %
Earnings
% of Sales 33.8 % 32.6 %
* Non-GAAP financial information excludes the after-tax impact of approximately
$1.63 per diluted share related to highlighted items, share-based compensation
expense and intangible assets amortization expense. Details regarding these non-
GAAP adjustments and the use of non-GAAP measures are included later in this
news release.
1
OTHER SELECTED FINANCIAL RESULTS
•
Revenue
- Sales were $3.4 billion, up 12% from the year-ago quarter driven by growth in
North America and International. Revenue growth related to acquisitions was $211
million and foreign currency tailwinds were $11 million in the quarter. The
Products and Systems Integration segment grew 12% driven by growth in Mission
Critical Networks ("MCN") and Video Security and Access Control ("Video"). The
Software and Services segment grew 13% driven by growth in MCN, Command Center
and Video.
•
Operating margin
- GAAP operating margin was 23.0% of sales, down from 25.6% in the year-ago
quarter primarily driven by an increase to the contingent Silvus earnout in the
current quarter due to strong performance of the business. Non-GAAP operating
margin was 32.5% of sales, up 200 basis points from 30.5% in the year-ago
quarter driven by higher sales and improved operating leverage, partially offset
by higher supply chain costs.
•
Taxes
- The GAAP effective tax rate during the quarter was 24.2%, versus 22.2% in the
year-ago quarter and the non-GAAP effective tax rate was 21.8%, versus 20.7% in
the year-ago quarter. The increases in the GAAP and non-GAAP effective tax rates
were primarily driven by lower benefits from share-based compensation recognized
in the current quarter.
•
Cash flow
- Operating cash flow was $662 million, compared to $799 million in the year-ago
quarter and free cash flow was $589 million, compared to $733 million in the
year-ago quarter. Both the operating cash flow and free cash flow for the
quarter decreased due to higher tax and interest payments during the quarter,
primarily offset by higher earnings, net of non-cash charges.
•
Capital allocation
- During the quarter, the company paid $200 million in cash dividends,
repurchased $94 million of common stock at an average price of $457.07 and
invested $73 million in capital expenditures. Additionally, the company
announced a $2 billion increase to the share repurchase authorization during the
quarter.
The company also closed the acquisition of D-Fend during the quarter for $1.3
billion, net of cash acquired, which was primarily funded through $950 million
of new long-term senior notes. The company also issued a new $300 million
364-day term loan and repaid $300 million of the 364-day term loan issued for
the Silvus acquisition, upon its maturity during the quarter.
In addition, the company acquired DeepNeuronic, a provider of AI software that
turns live camera feeds into real-time operational insights, for $29 million,
net of cash acquired.
•
Backlog
- The company ended the quarter with record backlog of $16.6 billion, up 14% or
$2.1 billion from the year-ago quarter driven by record Q3 orders in all three
technologies. Products and Systems Integration segment backlog was up $635
million, or 18%, driven primarily by strong demand in MCN and Video. Software
and Services segment backlog was up $1.4 billion, or 13%, driven by strong
demand in all three technologies.
2
NOTABLE WINS AND ACHIEVEMENTS
Products and Systems Integration
• $140 million P25 systems and device order with the Federal Bureau of Prisons
• $98 million P25 device and SVX order for a U.S. federal customer
• $63 million P25 system and device order for the Metro Government of Nashville
and Davidson County
• $56 million fixed video order for a large convenience store chain
• $39 million Silvus order for a German unmanned systems provider
Software and Services
• $139 million ten-year P25 services, mobile video and Command Center order for
the State of Louisiana
• $78 million eight-year mobile video award for a U.S. federal customer
• $59 million six-year P25 services order for a state and local customer
• $51 million computer aided dispatch and records management order for the Los
Angeles Police Dept
• $27 million P25 services renewal for North Carolina State Highway Patrol
BUSINESS OUTLOOK
•
Fourth quarter 2026
- The company expects revenue growth of approximately 13% compared to the fourth
quarter of 2025 and non-GAAP EPS between $5.47 and $5.52 per share. This assumes
approximately 168 million of fully diluted shares and a non-GAAP effective tax
rate of approximately 22.5%.
•
Full-year 2026
- The company now expects revenue of approximately $13.050 billion, up from its
prior guidance of $12.975 billion and non-GAAP EPS between $17.94 and $17.99 per
share, up from its prior guidance of between $17.62 and $17.72 per share. This
outlook assumes approximately 168 million of fully diluted shares and a non-GAAP
effective tax rate between 21.5% and 22%.
In addition, the company is increasing its operating cash flow expectations to
$3.050 billion for the full year.
The company has not quantitatively reconciled its guidance for forward-looking
non-GAAP measurements in this news release to their most comparable GAAP
measurements because the company does not provide specific guidance for the
various reconciling items as certain items that impact these measurements have
not occurred, are out of the company’s control, or cannot be reasonably
predicted. Accordingly, a reconciliation to the most comparable GAAP financial
measurement is not available without unreasonable effort. Please note that the
unavailable reconciling items could significantly impact the company’s results.
3
RECENT EVENTS
MACROECONOMIC ENVIRONMENT UPDATE
The global trade landscape continues to shift rapidly, including evolving
tariffs and import/export regulations, such as restrictions around rare earth
minerals, trade barriers and trade disputes.
On February 20, 2026, a U.S. Supreme Court ruling invalidated tariffs imposed
under the International Emergency Economic Powers Act (“IEEPA”). On April 20,
2026, the U.S. Customs and Border Protection launched a system to process IEEPA
tariff refund claims. Following the implementation of this system, the company
determined that the recovery of a portion of these refunds is now probable.
Accordingly, during the nine months ended October 3, 2026, the company
recognized a favorable adjustment of approximately $70 million recorded within
Cost of sales in its Condensed Consolidated Statements of Operations.
In addition, the company is experiencing higher costs for memory in its products
which is a result of substantial demand in the market driven by AI. As a result,
the company continues to observe elevated volatility and uncertainty around the
global supply chain. The company engages with global suppliers across a diverse
network of locations around the world. The company is actively managing its
inventory and continues to work with its global supply base to mitigate its
exposure to elevated volatility and uncertainty from these rising memory costs,
as well as global tariffs and import/export regulations that have developed, and
which may continue to develop, to ensure supply continues at levels necessary to
meet its current customer demand. The company expects inventory levels to remain
elevated as it mitigates this dynamic supply chain environment. The current
environment has led to increased costs on materials and components, for which
the company continues to develop mitigation actions going forward.
CONFERENCE CALL AND WEBCAST
Motorola Solutions will host its quarterly conference call beginning at 4 p.m.
U.S. Central Time (5 p.m. U.S. Eastern Time) on Wednesday, November 4. The
conference call will be webcast live at www.motorolasolutions.com/investors. An
archive of the webcast will be available for a limited period of time
thereafter.
CONSOLIDATED GAAP RESULTS
(presented in millions, except per share data)
A comparison of results from operations is as follows:
Q3 2026 Q3 2025
Net sales $3,376 $3,009
Gross margin $1,768 $1,554
Operating earnings $777 $770
Amounts attributable to Motorola
Solutions, Inc. common stockholders
Net earnings $512 $562
Diluted EPS $3.06 $3.33
Weighted average diluted common shares 167.4 169.0
outstanding
4
USE OF NON-GAAP FINANCIAL INFORMATION
In addition to the results presented in accordance with accounting principles
generally accepted in the U.S. ("GAAP") included in this news release, Motorola
Solutions also has included non-GAAP measurements of results, including free
cash flow, non-GAAP operating earnings, non-GAAP EPS, non-GAAP operating margin,
non-GAAP net earnings attributable to MSI, non-GAAP tax rate, and organic
revenue. The company has provided these non-GAAP measurements to help investors
better understand its core operating performance, enhance comparisons of core
operating performance from period-to-period and allow better comparisons of its
operating performance to that of its competitors. Among other things, management
uses these operating results, excluding the identified items, to evaluate the
performance of its businesses and to evaluate results relative to certain
incentive compensation targets. Management uses operating results excluding
these items because it believes these measurements enable it to make better
period-to-period evaluations of the financial performance of its core business
operations. The non-GAAP measurements are intended only as a supplement to the
comparable GAAP measurements and the company compensates for the limitations
inherent in the use of non-GAAP measurements by using GAAP measures in
conjunction with the non-GAAP measurements. As a result, investors should
consider these non-GAAP measurements in addition to, and not in substitution for
or as superior to, GAAP measurements.
Reconciliations: Details and reconciliations of such non-GAAP measurements to
the corresponding GAAP measurements can be found at the end of this news
release.
Free cash flow: Free cash flow represents net cash provided by operating
activities less capital expenditures. The company believes that free cash flow
is useful to investors as the basis for comparing its performance and coverage
ratios with other companies in the company's industries, although the company's
measure of free cash flow may not be directly comparable to similar measures
used by other companies. This measure is also used as a component of incentive
compensation.
Organic Revenue: Organic revenue reflects net sales calculated under GAAP
excluding net sales from acquired business owned for less than four full
quarters. The company believes organic revenue provides useful information for
evaluating the periodic growth of the business on a consistent basis and
provides for a meaningful period-to-period comparison and analysis of trends in
the business.
Non-GAAP operating earnings, non-GAAP EPS, non-GAAP operating margin and non-
GAAP net earnings attributable to MSI each excludes highlighted items, including
share-based compensation expenses and intangible assets amortization expense, as
follows:
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, adjustments to contingent earnout, 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.
Hytera-Related Legal Expenses: In 2017, the company filed a complaint against
Hytera Communications Corporation Limited of Shenzhen, China; Hytera America,
Inc.; and Hytera Communications America (West), Inc. (collectively, "Hytera"),
in the U.S. District Court for the Northern District of Illinois (the "District
Court"), alleging trade secret theft and copyright infringement, and seeking
injunctive relief. In
5
2020, a jury decided in the company's favor, ultimately resulting in an award to
the company of $543.7 million, plus $51.1 million in pre-judgment interest and
$2.6 million in costs, as well as $34.2 million in attorneys' fees.
In 2024, after both parties appealed to the U.S. Court of Appeals for the
Seventh Circuit (the "Court of Appeals"), the Court of Appeals, among other
items, affirmed the District Court's award of $407.4 million in damages under
the Defend Trade Secrets Act, and directed the District Court to recalculate and
reduce its award of $136.3 million in copyright infringement damages, which
remains subject to ruling by the District Court. As of October 3, 2026, as a
result of this civil litigation and 2020 bankruptcy proceedings by Hytera
America, Inc. and Hytera Communications America (West), Inc., Hytera had paid
$245 million against this award, $73 million of which was paid in the first nine
months of 2026. These payments were recorded as a gain within Other charges
within the Consolidated Statement of Operations.
Further, in 2022, the District Court ordered Hytera to pay the company a
forward-looking reasonable royalty on Hytera’s products (“I-Series”) that use
the company’s stolen trade secrets, applicable to I-Series products sold from
July 1, 2019 forward. In 2024, the company received royalties of $61 million
related to the I-Series products, which was recorded as a gain within Other
charges within the Consolidated Statement of Operations. Beginning in 2025, a
favorable ruling in a related legal proceeding in the District Court (which
Hytera has subsequently appealed to the Court of Appeals) also ordered Hytera to
pay the company for Hytera’s continued use of the company’s trade secrets and
copyrighted source code in Hytera’s currently shipping products (“H-Series”),
and Hytera has subsequently reported to the company approximately $116 million
in royalties subject to the Court's order. While several aspects of the court
proceedings related to the H-Series are subject to appeal, the company continues
to seek collection of the amounts owed by Hytera through the ongoing legal
process.
Management typically considers legal expenses associated with defending the
company's intellectual property as “normal and recurring.” Since 2020, the
company has believed that Hytera-related legal expenses have not been part of
its “normal and recurring” legal expenses incurred to operate its business and
has accordingly excluded such expenses from its GAAP operating Income. In
addition, as any contingent or actual gains associated with the Hytera
litigation are recognized, they will be similarly excluded from the company's
non-GAAP operating income, consistent with the company's treatment of the
approximately $15 million realized in 2022, $61 million realized in 2024, $157
million realized in 2025, and $73 million realized in the first nine months of
2026. The company believes after the jury award, the presentation of excluding
both Hytera-related legal expenses and gains related to awards better aligns
with how management evaluates the company's ongoing underlying business
performance.
Share-based compensation expenses: The company has excluded share-based
compensation expense from its non-GAAP operating expenses and net income
measurements. Although share-based compensation is a key incentive offered to
the company’s employees and the company believes such compensation contributed
to the revenue earned during the periods presented and also believes it will
contribute to the generation of future period revenues, the company continues to
evaluate its performance excluding share-based compensation expense primarily
because it represents a significant non-cash expense. Share-based compensation
expense will recur in future periods.
Intangible assets amortization expense: The company has excluded intangible
assets amortization expense from its non-GAAP operating expenses and net
earnings measurements primarily because it represents a non-cash expense and
because the company evaluates its performance excluding intangible assets
amortization expense. Amortization of intangible assets is consistent in amount
and frequency but is significantly affected by the timing and size of the
company’s acquisitions. Investors should note that the use of intangible assets
contributed to the company’s revenues earned during the periods presented and
will contribute to the company’s future period revenues as well. Intangible
assets amortization expense will recur in future periods.
6
FORWARD LOOKING STATEMENTS
This news release contains "forward-looking statements" within the meaning of
applicable federal securities law. These statements are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995
and generally include words such as “believes,” “expects,” “intends,”
“anticipates,” “estimates” and similar expressions. The company can give no
assurance that any actual or future results or events discussed in these
statements will be achieved. Any forward-looking statements represent the
company’s views only as of today and should not be relied upon as representing
the company’s views as of any subsequent date. Readers are cautioned that such
forward-looking statements are subject to a variety of risks and uncertainties
that could cause the company’s actual results to differ materially from the
statements contained in this release. Such forward-looking statements include,
but are not limited to, Motorola Solutions’ financial outlook for the fourth
quarter and full-year of 2026; and the impact of changes in the global trade
environment, the dynamic supply chain environment and the memory market on
Motorola Solutions' business, and Motorola Solutions' actions in response
thereto (including with respect to inventory levels). Motorola Solutions
cautions the reader that the risks and uncertainties below, as well as those in
Part I Item 1A of Motorola Solutions’ 2025 Annual Report on Form 10-K and in its
other SEC filings available for free on the SEC’s website at www.sec.gov and on
Motorola Solutions’ website at www.motorolasolutions.com/investors, could cause
Motorola Solutions’ actual results to differ materially from those estimated or
predicted in the forward-looking statements. Many of these risks and
uncertainties cannot be controlled by Motorola Solutions, and factors that may
impact forward-looking statements include, but are not limited to: (i) impact of
current global economic and political conditions in the markets in which the
company operates; (ii) increased areas of risk, increased competition and
additional compliance obligations associated with the introduction of new or
enhanced products and services in our segments; (iii) challenges relating to the
use of artificial intelligence ("AI") in our products and services; (iv) impact
of catastrophic events on our business or our customers' or suppliers' business;
(v) the effectiveness of our strategic acquisitions, including the integrations
of such acquired businesses; (vi) the inability of our products to meet our
customers’ expectations or regulatory or industry standards, or actual or
perceived systems or service failures of our products and services; (vii) our
inability to purchase a sufficient amount of materials, parts, and components,
as well as software and services, at acceptable prices to meet the demands of
our customers, and any disruption to our suppliers or significant increase in
the price of supplies; (viii) risks related to our large, multi-year system and
services contracts; (ix) the global nature of our employees, customers,
suppliers and outsource partners; (x) our use of third-parties to develop,
design and/or manufacture many of our components and some of our products, and
to perform portions of our business operations; (xi) the inability of our
subcontractors to perform in a timely and compliant manner or adhere to our
Human Rights Policy; (xii) inability to attract and retain senior management and
key employees; (xiii) evolving and sometimes conflicting expectations from
investors, customers, lawmakers, regulators and other stakeholders regarding
social and sustainability considerations and disclosures; (xiv) challenges
relating to existing or future legislation and regulations pertaining to AI, AI-
enabled products and the use of biometrics and other video analytics; (xv) the
impact, including increased costs and potential liabilities, associated with
changes in laws and regulations regarding cybersecurity, privacy, data
protection, data sovereignty and information security; (xvi) the impact of
government regulation of radio frequencies; (xvii) regulations, laws and other
compliance requirements and risks applicable to our U.S. government customer
contracts and grants; (xviii) the impact, including increased costs and
additional compliance obligations, associated with existing or future
telecommunications-related laws and regulations; (xix) impact of product
regulatory and safety, consumer, worker safety and environmental product
compliance and remediation laws; (xx) impact of tax matters; (xxi) increased
cybersecurity threats, a security breach or other significant disruption of our
IT systems or those of our outsource partners, suppliers or customers; (xxii)
our inability to protect our intellectual property or potential infringement of
intellectual property rights of third parties; (xxiii) risks relating to
intellectual property licenses and intellectual property indemnities in our
customer and supplier contracts; (xxiv) our license of the MOTOROLA, MOTO,
MOTOROLA SOLUTIONS and the Stylized M logo and all derivatives and formatives
thereof from Motorola Trademark Holdings, LLC; (xxv) inability to access the
capital markets for financing on acceptable terms and conditions; (xxvi)
exposure to exchange rate fluctuations on cross-border transactions and the
translation of local currency results into U.S. dollars; (xxvii) impact of
returns on pension and retirement plan assets and interest rate changes; and
(xxviii) the return of capital to shareholders through dividends and/or
repurchasing shares. Motorola Solutions undertakes no obligation
7
to publicly update any forward-looking statement or risk factor, whether as a
result of new information, future events or otherwise.
The company uses its website as a means of disclosing material, non-public
information and for complying with the company's disclosure obligations under
Regulation FD. Therefore, the company encourages investors to monitor the
Investor Relations page of the company's website at
www.motorolasolutions.com/investors, and review the information the company
posts on that page.
About Motorola Solutions | Solving for safer
Safety and security are at the heart of everything we do at Motorola Solutions.
We build and connect technologies to help protect people, property and places.
Our solutions foster the collaboration that’s critical for safer communities,
safer schools, safer hospitals, safer businesses, and ultimately, safer nations.
Learn more about our commitment to innovating for a safer future for us all at
www.motorolasolutions.com .
MEDIA CONTACT
Matt Schuler
Motorola Solutions
+1 312-909-5234
matt.schuler@motorolasolutions.com
INVESTOR CONTACT
Brian Piotrowski
Motorola Solutions
+1 847-576-6899
Brian.Piotrowski@motorolasolutions.com
MOTOROLA, MOTOROLA SOLUTIONS and the Stylized M Logo are trademarks or
registered trademarks of Motorola Trademark Holdings, LLC and are used under
license. All other trademarks are the property of their respective owners. ©2026
Motorola Solutions, Inc. All rights reserved.
8
GAAP-1
Motorola Solutions, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In millions, except per share amounts)
Three Months September 27,
Ended October 3, 2026 2025
──────────────────────────────────────────────────────────────────────────────
Net sales from $ 1,999 $ 1,751
products
Net sales from 1,377 1,258
services
Net sales 3,376 3,009
Costs of 800 728
products sales
Costs of 808 727
services sales
Costs of sales 1,608 1,455
Gross margin 1,768 1,554
Selling,
general and 504 485
administrative
expenses
Research and
development 276 237
expenditures
Other charges 114 -4
(income)
Intangibles 97 66
amortization
Operating 777 770
earnings
Other income
(expense):
Interest -107 -86
expense, net
Other, net 8 41
Total other -99 -45
expense
Net earnings
before income 678 725
taxes
Income tax 164 161
expense
Net earnings 514 564
Less: Earnings
attributable
to 2 2
non-controlli…
interests
Net earnings
attributable
to Motorola $ 512 $ 562
Solutions,
Inc.
Earnings per
common share:
Basic $ 3.09 $ 3.37
Diluted $ 3.06 $ 3.33
Weighted
average common
shares
outstanding:
Basic 165.5 166.6
Diluted 167.4 169.0
Percentage of
Net Sales*
Net sales from 59.2 % 58.2 %
products
Net sales from 40.8 % 41.8 %
services
Net sales 100.0 % 100.0 %
Costs of 40.0 % 41.6 %
products sales
Costs of 58.7 % 57.8 %
services sales
Costs of sales 47.6 % 48.4 %
Gross margin 52.4 % 51.6 %
Selling,
general and 14.9 % 16.1 %
administrative
expenses
Research and
development 8.2 % 7.9 %
expenditures
Other charges 3.4 % -0.1 %
(income)
Intangibles 2.9 % 2.2 %
amortization
Operating 23.0 % 25.6 %
earnings
Other income
(expense):
Interest -3.2 % -2.9 %
expense, net
Other, net 0.2 % 1.4 %
Total other -2.9 % -1.5 %
expense
Net earnings
before income 20.1 % 24.1 %
taxes
Income tax 4.9 % 5.4 %
expense
Net earnings 15.2 % 18.7 %
Less: Earnings
attributable
to 0.1 % 0.1 %
non-controlli…
interests
Net earnings
attributable
to Motorola 15.2 % 18.7 %
Solutions,
Inc.
* Percentages
may not add up
due to
rounding
9
GAAP-2
Motorola Solutions, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In millions, except per share amounts)
Nine Months September 27,
Ended October 3, 2026 2025
──────────────────────────────────────────────────────────────────────────────
Net sales from $ 5,298 $ 4,731
products
Net sales from 3,925 3,571
services
Net sales 9,223 8,302
Costs of 2,130 1,948
products sales
Costs of 2,285 2,087
services sales
Costs of sales 4,415 4,035
Gross margin 4,808 4,267
Selling,
general and 1,439 1,371
administrative
expenses
Research and
development 788 700
expenditures
Other charges 188 10
Intangibles 282 142
amortization
Operating 2,111 2,044
earnings
Other income
(expense):
Interest -315 -192
expense, net
Other, net 64 100
Total other -251 -92
expense
Net earnings
before income 1,860 1,952
taxes
Income tax 420 442
expense
Net earnings 1,440 1,510
Less: Earnings
attributable
to 5 5
non-controlli…
interests
Net earnings
attributable
to Motorola $ 1,435 $ 1,505
Solutions,
Inc.
Earnings per
common share:
Basic $ 8.66 $ 9.02
Diluted $ 8.57 $ 8.89
Weighted
average common
shares
outstanding:
Basic 165.7 166.8
Diluted 167.5 169.2
Percentage of
Net Sales*
Net sales from 57.4 % 57.0 %
products
Net sales from 42.6 % 43.0 %
services
Net sales 100.0 % 100.0 %
Costs of 40.2 % 41.2 %
products sales
Costs of 58.2 % 58.4 %
services sales
Costs of sales 47.9 % 48.6 %
Gross margin 52.1 % 51.4 %
Selling,
general and 15.6 % 16.5 %
administrative
expenses
Research and
development 8.5 % 8.4 %
expenditures
Other charges 2.0 % 0.1 %
(income)
Intangibles 3.1 % 1.7 %
amortization
Operating 22.9 % 24.6 %
earnings
Other income
(expense):
Interest -3.4 % -2.3 %
expense, net
Other, net 0.7 % 1.2 %
Total other -2.7 % -1.1 %
expense
Net earnings
before income 20.2 % 23.5 %
taxes
Income tax 4.6 % 5.3 %
expense
Net earnings 15.6 % 18.2 %
Less: Earnings
attributable
to 0.1 % 0.1 %
non-controlli…
interests
Net earnings
attributable
to Motorola 15.6 % 18.1 %
Solutions,
Inc.
* Percentages
may not add up
due to
rounding
10
GAAP-3
Motorola Solutions, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In millions)
October 3, 2026 December 31, 2025
──────────────────────────────────────────────────────────────────────────────
Assets
Cash and cash equivalents $ 774 $ 1,165
Accounts receivable, net 2,441 2,200
Contract assets 1,535 1,574
Inventories, net 1,511 983
Other current assets 452 378
Total current assets 6,713 6,300
Property, plant and equipment, 1,203 1,165
net
Operating lease assets 534 581
Investments 292 187
Deferred income taxes 697 761
Goodwill 7,666 6,800
Intangible assets, net 3,502 3,104
Other assets 534 491
Total assets $ 21,141 $ 19,389
Liabilities and Stockholders'
Equity
Short-term borrowings $ 750 $ 749
Accounts payable 1,049 1,134
Contract liabilities 2,481 2,265
Accrued liabilities 1,839 1,930
Total current liabilities 6,119 6,078
Long-term debt 9,361 8,413
Operating lease liabilities 409 471
Other liabilities 2,166 2,000
Total Motorola Solutions, Inc. 3,069 2,410
stockholders’ equity
Non-controlling interests 17 17
Total liabilities and
stockholders’ $ 21,141 $ 19,389
equity
11
GAAP-4
Motorola Solutions, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In millions)
Three Months September 27,
Ended October 3, 2026 2025
──────────────────────────────────────────────────────────────────────────────
Operating
Net earnings $ 514 $ 564
Adjustments to
reconcile Net
earnings to
Net cash
provided by
operating
activities:
Depreciation
and 150 115
amortization
Contingent
earnout 87 —
adjustment
Non-cash other 10 1
charges
Share-based
compensation 103 73
expenses
Changes in
assets and
liabilities,
net
of effects of
acquisitions,
dispositions,
and foreign
currency
translation
adjustments:
Accounts -263 -128
receivable
Inventories -148 -23
Other current
assets and -33 -108
contract assets
Accounts
payable,
accrued 47 175
liabilities
and contract
liabilities
Other assets 157 52
and liabilities
Deferred income 38 78
taxes
Net cash
provided by 662 799
operating
activities
Investing
Acquisitions
and -1,363 -4,370
investments,
net
Proceeds from
sales of 2 2
investments and
businesses, net
Capital -73 -66
expenditures
Net cash used
for investing -1,434 -4,434
activities
Financing
Net proceeds
from issuance 942 750
of debt
Net proceeds
from short-term 435 923
borrowings
Repayments of -300 -70
short-term debt
Issuances of
common stock, 54 32
net of tax
Purchases of -94 -121
common stock
Payments of -200 -182
dividends
Payments of
dividends to -1 -1
non-controlling
interests
Net cash
provided by 836 1,331
financing
activities
Effect of
exchange rate
changes on — -8
total
cash and cash
equivalents
Net increase
(decrease) in
total cash 64 -2,312
and cash
equivalents
Cash and cash
equivalents, 710 3,206
beginning of
period
Cash and cash
equivalents, $ 774 $ 894
end of period
12
GAAP-5
Motorola Solutions, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In millions)
September 27,
Nine Months Ended October 3, 2026 2025
──────────────────────────────────────────────────────────────────────────────
Operating
Net earnings $ 1,440 $ 1,510
Adjustments to
reconcile Net
earnings to
Net cash
provided by
operating
activities:
Depreciation
and 441 282
amortization
Contingent
earnout 178 —
adjustment
Non-cash other
charges 10 -4
(income)
Share-based
compensation 307 213
expenses
Changes in
assets and
liabilities,
net
of effects of
acquisitions,
dispositions,
and foreign
currency
translation
adjustments:
Accounts -227 1
receivable
Inventories -503 -107
Other current
assets and -24 -230
contract assets
Accounts
payable,
accrued -161 -280
liabilities
and contract
liabilities
Other assets 73 101
and liabilities
Deferred income 48 95
taxes
Net cash
provided by 1,582 1,581
operating
activities
Investing
Acquisitions
and -1,587 -4,835
investments,
net
Proceeds from
sales of 8 14
investments and
businesses, net
Capital -190 -151
expenditures
Proceeds from
sales of 1 —
property, plant
and equipment
Net cash used
for investing -1,768 -4,972
activities
Financing
Net proceeds
from issuance 942 2,733
of debt
Net proceeds
from short-term 500 923
borrowings
Repayments of -500 -322
short-term debt
Revolving
credit facility — -5
renewal fees
Issuances of
common stock, 45 -3
net of tax
Purchases of -543 -664
common stock
Payments of -602 -546
dividends
Payments of
dividends to -5 -5
non-controlling
interests
Net cash
provided by
(used for) -163 2,111
financing
activities
Effect of
exchange rate
changes on -42 72
total
cash and cash
equivalents
Net decrease in
total cash and -391 -1,208
cash
equivalents
Cash and cash
equivalents, 1,165 2,102
beginning of
period
Cash and cash
equivalents, $ 774 $ 894
end of period
13
Non-GAAP-1
Motorola Solutions, Inc. and Subsidiaries
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow
(In millions)
Three Septem… Nine
Months October 27, Months October Septemb…
Ended 3, 2026 2025 Ended 3, 2026 27, 2025
──────────────────────────────────────────────────────────────────────────────
Net
cash
provi… $ 662 $ 799 $ 1,582 $ 1,581
by
opera…
activ…
Capit… -73 -66 -190 -151
expen…
Free
cash $ 589 $ 733 $ 1,392 $ 1,430
flow
14
Non-GAAP-2
Motorola Solutions, Inc. and Subsidiaries
Reconciliation of Net Earnings Attributable to MSI to Non-GAAP Net Earnings
Attributable to MSI
(In millions)
Th… Oc… Se… Ni… Oc… Se…
St… Mo… 3, 27, Mo… 3, 27,
Li… En… 20… 20… En… 20… 20…
──────────────────────────────────────────────────────────────────────────────
N…
e…
a… $ 512 $ 562 $ 1,… $ 1,…
to
M…
N…
a…
b…
i…
t…
Co…
S… of
c… sa… $ 103 $ 73 $ 307 $ 213
e… SG…
and
R&D
I…
a… In… 97 66 282 142
a… am…
e…
C… Ot…
e… ch… 87 — 178 —
a… (i…
A… Ot…
t… ch… 29 55 42 63
f… (i…
Co…
R… of
of sa…
b… and 12 14 42 45
c… Ot…
ch…
(i…
F…
v… Ot…
a… (i… 9 -8 1 -21
to ex…
e…
i…
H…
l… SG… 3 11 9 31
e…
A… In…
of in…
u… ne… 1 1 2 2
t… Ot…
p… (i…
ex…
L… Ot…
s… ch… 1 2 5 7
(i…
O… Ot…
l… ch… — 1 5 1
a… (i…
i…
I… Ot…
i… (i… — 2 — 2
ex…
L…
on Ot…
f… (i… — — — 2
i… ex…
c…
F… Ot…
a… ch… — — 1 —
i… (i…
G… Ot…
on ch… -13 -74 -73 -94
H… (i…
l…
T…
N…
a… $ 329 $ 143 $ 801 $ 393
b…
i…
t…
I…
t…
e… 56 19 148 70
on
N…
a…
T…
N…
a… 273 124 653 323
a…
i…
t…
N…
N…
e… $ 785 $ 686 $ 2,… $ 1,…
a…
to
M…
Calculation of Non-GAAP Tax Rate
(In millions)
Three Octob… Sept… Nine Octo… Septe…
Mont… 3, 27, Months 3, 27,
Ended 2026 2025 Ended 2026 2025
──────────────────────────────────────────────────────────────────────────────
Net
earn…
befo… $ 678 $ 725 $ 1,860 $ 1,952
inco…
taxes
Total
Non-…
adju… 329 143 801 393
befo…
inco…
taxe…
Non-…
Net
earn… 1,007 868 2,661 2,345
befo…
inco…
taxes
Inco…
tax 164 161 420 442
expe…
Inco…
tax
expe… 56 19 148 70
on
Non-…
adju…
Total
Non-…
Inco… $ 220 $ 180 $ 568 $ 512
tax
expe…
Non-…
Tax 21.8 % 20.7 % 21.3 % 21.8 %
rate
*See
reco…
on
Non-…
table
above
for
deta…
on
Non-…
adju…
befo…
inco…
taxes
**In…
tax
impa…
of
high…
items
15
Non-GAAP-2
Reconciliation of Earnings Per Share to Non-GAAP Earnings Per Share*
Th… Oc… Se… Ni… Oc… Se…
St… Mo… 3, 27, Mo… 3, 27,
Li… En… 20… 20… En… 20… 20…
──────────────────────────────────────────────────────────────────────────────
N…
e…
a… $ 3.… $ 3.… $ 8.… $ 8.…
to
M…
N…
a…
b…
i…
t…
Co…
S… of
c… sa… $ 0.… $ 0.… $ 1.… $ 1.…
e… SG…
and
R&D
I…
a… In… 0.… 0.… 1.… 0.…
a… am…
e…
C… Ot…
e… ch… 0.… — 1.… —
a… (i…
A… Ot…
t… ch… 0.… 0.… 0.… 0.…
f… (i…
Co…
R… of
of sa…
b… and 0.… 0.… 0.… 0.…
c… Ot…
ch…
(i…
F…
v… Ot…
a… (i… 0.… -0… 0.… -0…
to ex…
e…
i…
H…
l… SG… 0.… 0.… 0.… 0.…
e…
A… In…
of in…
u… ne… 0.… 0.… 0.… 0.…
t… Ot…
p… (i…
ex…
L… Ot…
s… ch… 0.… 0.… 0.… 0.…
(i…
O… Ot…
l… ch… — 0.… 0.… 0.…
a… (i…
i…
I… Ot…
i… (i… — 0.… — 0.…
ex…
L…
on Ot…
f… (i… — — — 0.…
i… ex…
c…
F… Ot…
a… ch… — — 0.… —
i… (i…
G… Ot…
on ch… -0… -0… -0… -0…
H… (i…
l…
T…
N…
a… $ 1.… $ 0.… $ 4.… $ 2.…
b…
i…
t…
I…
t…
e… 0.… 0.… 0.… 0.…
on
N…
a…
T…
N…
a… 1.… 0.… 3.… 1.…
a…
i…
t…
N…
N…
e… $ 4.… $ 4.… $ 12… $ 10…
a…
to
M…
D…
W…
A… 16… 16… 16… 16…
C…
S…
*…
N…
D…
E…
16
Non-GAAP-3
Motorola Solutions, Inc. and Subsidiaries
Reconciliations of Operating Earnings to Non-GAAP Operating Earnings and
Operating Margin to Non-GAAP Operating Margin
(In millions)
T… O… S…
M… 3, 2…
E… 2… 2…
──────────────────────────────────────────────────────────────────────────────
P… S… … …
a… a… T… … … …
S… S… … …
I… …
… $ 2… $ 1… $ 3… $ 1… $ 1… $ 3…
…
…
… 4… 3… 7… 4… 3… 7…
…
…
…
…
…
…
… 78 9 87 — — —
…
…
… 69 34 1… 53 20 73
…
…
… 59 38 97 44 22 66
…
…
…
… 20 9 29 52 3 55
…
…
… 9 3 12 9 5 14
…
…
…
… 3 — 3 11 — 11
…
… — 1 1 1 1 2
…
…
… — — — 1 — 1
…
…
…
… -… — -… -… — -…
…
…
…
… 2… 94 3… 97 51 1…
…
…
…
…
… $ 6… $ 4… $ 1… $ 5… $ 3… $ 9…
…
…
…
…
…
a
… 2… % 2… % 2… % 2… % 2… % 2… %
…
…
…
-
…
…
…
…
a
…
… 3… % 3… % 3… % 2… % 3… % 3… %
…
…
-
…
…
…
17
Non-GAAP-4
Motorola Solutions, Inc. and Subsidiaries
Reconciliations of Operating Earnings to Non-GAAP Operating Earnings and
Operating Margin to Non-GAAP Operating Margin
(In millions)
N… O… S…
M… 3, 2…
E… 2… 2…
──────────────────────────────────────────────────────────────────────────────
P… S… … …
a… a… T… … … …
S… S… … …
I… …
… $ 5… $ 3… $ 9… $ 5… $ 3… $ 8…
…
…
… 1… 9… 2… 1… 8… 2…
…
…
…
…
…
… 2… 1… 3… 1… 58 2…
…
…
… 1… 96 2… 76 66 1…
…
…
…
… 1… 18 1… — — —
…
…
… 30 12 42 31 14 45
…
…
…
… 22 20 42 54 9 63
…
…
… 9 — 9 31 — 31
…
…
… 3 2 5 1 — 1
…
…
… 3 2 5 4 3 7
…
…
… 1 — 1 — — —
…
…
… -… — -… -… — -…
…
…
…
… 5… 2… 7… 2… 1… 4…
…
…
…
…
… $ 1… $ 1… $ 2… $ 1… $ 1… $ 2…
…
…
…
…
…
a
… 1… % 2… % 2… % 2… % 2… % 2… %
…
…
…
-
…
…
…
…
a
…
… 2… % 3… % 3… % 2… % 3… % 2… %
…
…
-
…
…
…
18
Non-GAAP-5
Motorola Solutions, Inc. and Subsidiaries
Reconciliation of Revenue to Non-GAAP Organic Revenue
(In millions)
Three
Months October Septemb…
Ended 3, 2026 27, 2025 % Change
──────────────────────────────────────────────────────────────────────────────
Net $ 3,376 $ 3,009 12 %
sales
Non-GA…
adjust…
Sales
from 323 112
acquis…
Organic $ 3,053 $ 2,897 5 %
revenue
Nine
Months
Ended
October Septemb… % Change
3, 2026 27, 2025
Net $ 9,223 $ 8,302 11 %
sales
Non-GA…
adjust…
Sales
from 789 115
acquis…
Organic $ 8,434 $ 8,187 3 %
revenue
19