Motorola Beats Q4 Earnings Estimates on Record Revenues & Margins

Core Insights - Motorola Solutions, Inc. (MSI) achieved record revenues, operating earnings, and operating margin in Q4 2025, driven by effective operational execution and strong growth dynamics supported by solid order trends [1][10] Financial Performance - GAAP earnings for Q4 2025 were $649 million or $3.86 per share, up from $611 million or $3.56 per share in Q4 2024, while non-GAAP earnings were $771 million or $4.59 per share compared to $693 million or $4.04 per share a year earlier, reflecting top-line growth [3][4] - For the full year 2025, GAAP earnings reached $2.15 billion or $12.75 per share, an increase from $1.58 billion or $9.23 per share in 2024, with non-GAAP earnings improving to $2.6 billion or $15.38 per share from $2.37 billion or $13.84 per share [4] Revenue Growth - Quarterly net sales were $3.38 billion, a 12% increase year over year, surpassing the consensus estimate of $3.34 billion, with strong performance across all regions and segments [5][10] - North American revenues rose 7% to $2.36 billion, while international revenues surged 26% to $1.02 billion, driven by video security and command center software sales [6] Segment Performance - Products and Systems Integration segment reported net sales of $2.16 billion, up 11% year over year, with a decrease in backlog to $3.8 billion [7] - Software and Services segment saw net sales increase by 15% to $1.22 billion, with backlog rising to $11.9 billion, indicating strong demand across technologies [8] Operating Metrics - GAAP operating earnings increased to $944 million from $814 million in the prior year, while non-GAAP operating earnings rose to $1.09 billion from $916 million [9] - Overall GAAP operating margin improved to 27.9% from 27%, and non-GAAP operating margin reached a record 32.1%, up from 30.4% [11] Cash Flow and Liquidity - Motorola generated $1.26 billion in cash from operating activities in Q4 2025, compared to $1.07 billion a year ago, with free cash flow of $1.14 billion [12] - The company repurchased $490 million worth of stock during the quarter and ended with $1.16 billion in cash and cash equivalents [12] Guidance - For Q1 2026, Motorola expects non-GAAP earnings between $3.20 and $3.25 per share, with revenue growth of 6-7% [13] - For the full year 2026, the company anticipates non-GAAP earnings of $16.70-$16.85 per share on revenues of approximately $12.7 billion, supported by healthy growth in both segments [13] Strategic Outlook - Motorola is positioned for growth through disciplined capital deployment and a strong balance sheet, with expectations of robust demand across LMR products, video security, services, and software [14]