Motorola Solutions (NYSE:MSI) reported what executives called an “exceptional” fourth quarter to close 2025, citing record revenue in both operating segments, record operating earnings, and record operating margins. Management said orders rose 26% in the quarter and backlog ended the year at an all-time high of $15.7 billion, up $1 billion from the prior year.
Quarterly performance and margins
CFO Jason Winkler said fourth-quarter revenue increased 12% and came in above the company’s guidance, with double-digit growth in both segments and across all three of its technology areas. Revenue included $188 million from acquisitions and a $30 million benefit from favorable foreign exchange.
GAAP EPS was $3.86 versus $3.56 a year earlier, and non-GAAP EPS rose 14% to $4.59. Operating expenses in the quarter were $700 million, up $48 million, primarily due to acquisition-related expenses. The effective tax rate for the quarter was 23.6%, up from 22% a year earlier, which Winkler said was driven by lower benefits from share-based compensation.
Full-year 2025 results and cash flow
For the full year, Motorola Solutions reported revenue of $11.7 billion, up 8%, including $382 million from acquisitions and a $35 million favorable FX impact. GAAP operating earnings were $3.0 billion (25.6% of sales) and non-GAAP operating earnings were $3.5 billion, with a record non-GAAP operating margin of 30.3%—the company’s first time exceeding 30% on an annual basis, according to CEO Greg Brown.
GAAP EPS was $12.75, which Winkler said was primarily influenced by a prior-year loss tied to the accounting treatment for settling the Silver Lake notes, while non-GAAP EPS rose 11% to $15.38.
Cash generation was another highlight. Operating cash flow in the fourth quarter was $1.3 billion versus $1.1 billion in the prior-year period. For 2025, the company delivered record operating cash flow of $2.8 billion, up 19%, and record free cash flow of $2.6 billion, up 21%.
Segment results and notable wins
In the Products and Systems Integration segment, fourth-quarter sales increased 11%, driven by 11% growth in “MCN” and 12% growth in video. Segment revenue included $151 million from acquisitions and $20 million from favorable FX. Operating earnings were $667 million, or 30.9% of sales, with tariff impacts partially offsetting leverage benefits.
Winkler cited several fourth-quarter awards in Products and SI, including:
- $180 million P25 system order for the state of Tennessee
- $162 million P25 device and SVX body-worn assistant order from a U.S. federal customer
- $81 million TETRA system for a customer in North Africa
- $20 million Silvus order for an unmanned systems provider
- $20 million fixed video order for a customer in Argentina
For the full year, Products and SI revenue was $7.3 billion, up 5%, with operating margin improving to 28.9% from 28.1%.
In Software and Services, fourth-quarter revenue increased 15%, driven by growth across all three technologies, including $37 million from acquisitions and a $10 million FX benefit. Segment operating margin expanded to 34.3% from 30.3% a year earlier on higher sales, favorable mix, and operating leverage.
Software and Services wins cited on the call included a $201 million 10-year P25 services renewal with the state of Maryland, as well as command center and TETRA services orders with customers including Prince George’s County in Maryland and the London Underground. Full-year Software and Services revenue was $4.4 billion, up 13%, and operating margin improved to 32.5%.
Backlog, orders, and regional trends
Motorola Solutions ended the year with total backlog of $15.7 billion, up $1 billion year-over-year and $1.2 billion sequentially, which Winkler said reflected record orders in the quarter and for the year. Products and SI backlog was $3.8 billion at year-end, with management noting it declined year-over-year due primarily to strong LMR shipments in the first half, while Software and Services backlog rose $1.4 billion from the prior year.
Regionally, North America fourth-quarter revenue rose 7% to $2.4 billion, and full-year North America revenue rose 7% to $8.4 billion. International revenue increased 26% in the fourth quarter to $1.0 billion and rose 11% for the year to $3.3 billion.
2026 outlook and product strategy updates
For 2026, the company guided to first-quarter sales growth of 6% to 7% and non-GAAP EPS of $3.20 to $3.25, based on a 168 million diluted share count and a 20.5% effective tax rate. For the full year, Motorola Solutions expects revenue of approximately $12.7 billion and non-GAAP EPS of $16.70 to $16.85, assuming about $100 million of favorable FX and a 22.5% effective tax rate. The company also expects operating cash flow of approximately $3 billion in 2026.
Winkler said the outlook includes expectations for segment growth of 10% to 11% in Software and Services and 7% to 8% in Products and SI. By technology, the company is planning for video growth of 10% to 11% (with continued cloud adoption), command center growth of 15%, and MCN growth of 7% to 8% with acceleration in the second half.
Management also discussed the launch of its “Assist Suites,” described as AI-powered packages tailored to public safety dispatchers and officers, offered under a role-based pricing model of $99 per user per month. Executives positioned the suites as an integrated approach that links workflows across 911 call handling, CAD, and other command center functions.
On Silvus, Brown said Motorola Solutions was “raising expectations again,” stating the company now expects Silvus revenue of $675 million in 2026, which he said is $75 million higher than expectations from the prior quarter. Brown attributed some recent upside to international demand and unmanned systems needs, including activity tied to Ukraine, and said the company is investing in R&D and go-to-market resources while also working on supply chain and cost improvements.
Winkler also addressed margin drivers for 2026, stating the company’s outlook includes about 100 basis points of operating margin expansion, despite planning for incremental tariffs of about $60 million in the first half and higher memory costs. He said margin expansion is expected to be supported by customer adoption of “feature-rich devices,” mix shift toward software and services, and cost management.
About Motorola Solutions (NYSE:MSI)
Motorola Solutions, Inc is a provider of mission-critical communications and analytics solutions for public safety and commercial customers. The company designs, manufactures and supports a range of communications equipment and software aimed at enabling first responders, government agencies and enterprises to coordinate and operate reliably in high-pressure environments. Its offerings emphasize secure, resilient connectivity and situational awareness for organizations that require dependable voice, data and video communications.
Product lines include land mobile radio (LMR) systems and handheld and vehicle-mounted radios used by police, fire and emergency medical services; broadband push-to-talk and LTE-based solutions; command-and-control center software for incident management and records; and video security and analytics systems.
