Motorola Solutions(US:MSI)2025-10-30 20:12Financial Performance - Q3 2025 sales reached $3.009 billion, an 8% increase from $2.790 billion in Q3 2024[2] - GAAP operating earnings were $770 million, up 8% from $711 million in the prior year, with an operating margin of 25.6%[3] - Non-GAAP EPS increased by 9% to $4.06, compared to $3.74 in Q3 2024[3] - Record Q3 operating cash flow of $799 million, up $40 million from the previous year[3] - The company ended Q3 with a record backlog of $14.6 billion, an increase of $467 million or 3% year-over-year[5] - In Q3 2025, Motorola Solutions reported net sales of $3,009 million, a 7.9% increase from $2,790 million in Q3 2024[37] - The gross margin for Q3 2025 was 51.6%, slightly up from 51.4% in Q3 2024[37] - Net sales increased to $8,302 million for the nine months ended September 27, 2025, up from $7,806 million for the same period in 2024, representing a growth of 6.3%[40] - Gross margin improved to 51.4% for the nine months ended September 27, 2025, compared to 50.8% in the prior year[40] - Net earnings attributable to Motorola Solutions, Inc. rose to $1,505 million for the nine months ended September 27, 2025, a significant increase of 55.5% from $966 million in the same period of 2024[40] Acquisitions and Investments - Acquired Silvus Technologies for $4.4 billion, funded through a combination of long-term senior notes and term loans[5] - Revenue from acquisitions contributed $123 million, with foreign currency tailwinds adding $21 million[6] - The company incurred $63 million in acquisition-related transaction fees during the nine months ended September 27, 2025[61] Guidance and Expectations - The company expects Q4 2025 revenue growth of approximately 11% compared to Q4 2024, with non-GAAP EPS guidance between $4.30 and $4.36[11] - Full-year 2025 revenue guidance maintained at approximately $11.65 billion, reflecting a 7.7% growth, while non-GAAP EPS guidance raised to between $15.09 and $15.15[11] Legal and Regulatory Matters - The GAAP effective tax rate for the quarter was 22.2%, up from 19.0% in the prior year, influenced by non-deductible transaction costs from the Silvus acquisition[6] - The company anticipates further legal expenses related to ongoing litigation with Hytera, which may impact future financial results[29] - Hytera was ordered to pay approximately $70 million for unpaid royalties and interest due to the continued use of Motorola's trade secrets in its H-Series products[28] - Forward-looking statements indicate potential risks including global economic conditions and regulatory changes that could affect future performance[32] Research and Development - Research and development expenditures for Q3 2025 were $237 million, slightly up from $234 million in Q3 2024[37] - Research and development expenditures increased to $700 million, accounting for 8.4% of net sales, compared to $671 million or 8.6% in the previous year[40] Cash Flow and Debt - The company reported a net cash provided by operating activities of $1,581 million for the nine months ended September 27, 2025, compared to $1,321 million in the same period of 2024[48] - Free cash flow for the nine months ended September 27, 2025, was $1,430 million, up from $1,150 million in the prior year[50] - Long-term debt rose to $8,411 million as of September 27, 2025, compared to $5,675 million at the end of 2024, indicating an increase of 48.5%[42] - The company’s cash and cash equivalents decreased to $894 million as of September 27, 2025, down from $2,102 million at the end of 2024[42] Earnings and Shareholder Returns - Basic earnings per share increased to $9.02 for the nine months ended September 27, 2025, compared to $5.79 in the same period of 2024, reflecting a growth of 55.0%[40] - Net earnings attributable to Motorola Solutions, Inc. for the three months ended September 27, 2025, were $562 million, consistent with the same period in 2024, while for the nine months ended, it increased to $1,505 million from $966 million[51] - Non-GAAP net earnings attributable to Motorola Solutions, Inc. for the three months ended September 27, 2025, were $686 million, compared to $639 million in the same period of 2024, and for the nine months ended, it rose to $1,828 million from $1,673 million[51] - The total non-GAAP adjustments before income taxes for the three months ended September 27, 2025, were $143 million, up from $111 million in the same period of 2024, and for the nine months ended, it was $393 million compared to $966 million[51] - The non-GAAP tax rate for the three months ended September 27, 2025, was 20.7%, slightly higher than 20.6% in the same period of 2024, while for the nine months ended, it was 21.8% compared to 22.0%[53] Operating Performance - Operating earnings for Q3 2025 reached $770 million, compared to $711 million in the same quarter of the previous year, reflecting an 8.3% increase[37] - Operating earnings for the nine months ended September 27, 2025, were $2,044 million, compared to $1,874 million for the same period in 2024, reflecting a growth of 9%[61] - Operating earnings as a percentage of net sales (GAAP) for the nine months ended September 27, 2025, was 24.6%, compared to 24.0% for the same period in 2024[61] - Non-GAAP operating earnings after adjustments for the nine months ended September 27, 2025, totaled $2,452 million, up from $2,226 million in the prior year[61] - Non-GAAP operating earnings after adjustments for the three months ended September 27, 2025, were $918 million, up from $830 million in the same period of 2024[58] - The operating earnings as a percentage of net sales after non-GAAP adjustments for the three months ended September 27, 2025, was 30.5%, compared to 29.7% in the same period of 2024[58] Share-Based Compensation - Share-based compensation expenses for the three months ended September 27, 2025, were $73 million, up from $61 million in the same period of 2024[51] - Share-based compensation expenses for the nine months ended September 27, 2025, were $213 million, compared to $180 million in the same period of 2024[61]