Motorola Beats Q2 Earnings Estimates on Record Revenues, Solid Orders

Motorola Solutions, Inc. MSI reported strong second-quarter 2025 results with record revenues and operating earnings, driven by the diligent execution of operational plans and healthy growth dynamics backed by robust order trends.

Adjusted earnings and revenues surpassed the respective Zacks Consensus Estimate. In addition, Motorola ended the quarter with solid operating cash flow, which further exemplified the strength of its portfolio. The company expects this momentum to continue in the near term on healthy demand patterns and accretive acquisitions.

Net Earnings

On a GAAP basis, Motorola reported GAAP earnings of $513 million or $3.04 per share compared with $443 million or $2.60 per share in the year-earlier quarter. The year-over-year improvement was primarily attributable to top-line growth.

Excluding non-recurring items, non-GAAP earnings in the quarter were $602 million or $3.57 per share compared with $552 million or $3.24 per share in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate by 21 cents.

Revenues

Quarterly net sales were a record high at $2.76 billion, up 5% year over year. Solid sales in both segments across all regions were driven by the strength of the company's business model and the value of its mission-critical integrated ecosystem. The company witnessed strong demand for video security, command center software and LMR (land mobile radio) services. The top line beat the consensus estimate of $2.74 billion. 

Region-wise, quarterly revenues increased 6% in North America to $2.03 billion, driven by growth in LMR, command center software and video security products. International revenues increased 4% to $738 million, driven by solid LMR sales. Acquisitions contributed $39 million to revenues, while foreign exchange tailwinds were $9 million.

Segmental Performance

Net sales from Products and Systems Integration remained flat at $1.65 billion as lower revenues from LMR were offset by an increase in video security products. The segment’s backlog was down $902 million to $3.4 billion, primarily due to solid LMR shipments.

Net sales from Software and Services were up 15% to $1.11 billion, with solid performance across command center software, LMR and video security services. The segment’s backlog increased $1 billion to $10.7 billion, led by strong demand across all three technologies.

Other Quarterly Details

GAAP operating earnings increased to $692 million from $644 million in the prior-year quarter, while non-GAAP operating earnings were up to $818 million from $758 million. The company ended the second quarter with a backlog of $14.1 billion, up $150 million year over year on record orders.

Overall, GAAP operating margin was 25%, up from 24.5%, while non-GAAP operating margin was 29.6% compared with 28.8% in the year-ago quarter. Non-GAAP operating earnings for Products and Systems Integration remained flat at $442 million for a margin of 26.7% as higher tariff costs and infrastructure investments were offset by lower direct material costs. Non-GAAP operating earnings for Software and Services were $376 million, up from $313 million, for a non-GAAP operating margin of 33.8% due to the higher sales and improved operating leverage.

Cash Flow and Liquidity

Motorola generated $272 million in cash from operating activities in the reported quarter compared with $180 million a year ago, bringing the respective tallies for the first six months of 2025 and 2024 to $783 million and $562 million. Free cash flow in the second quarter was $224 million. The company repurchased $218 million worth of stock during the quarter. As of June 30, 2025, MSI had $3.21 billion of cash and cash equivalents with $7.66 billion of long-term debt.

Guidance

For third-quarter 2025, Motorola expects non-GAAP earnings in the range of $3.82 to $3.87 per share on revenue growth of approximately 7%.

With solid quarterly results and robust demand patterns, the company raised its guidance for 2025. Non-GAAP earnings for 2025 are currently expected in the $14.88-$14.98 per share range, up from $14.64-$14.74 on revenue growth of 7.7% or $11.65 billion (up from 5.5% or $11.4 billion expected earlier), with a rise in both segments on higher demand.

Moving Forward

Motorola is poised to gain from disciplined capital deployment and a strong balance sheet position. The company expects strong demand across LMR products, the video security portfolio, services and software while benefiting from a solid foundation.

Motorola currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Releases

Keysight Technologies, Inc. KEYS is scheduled to release third-quarter 2025 earnings on Aug. 19. The Zacks Consensus Estimate for earnings is pegged at $1.67 per share, suggesting a growth of 6.4% from the year-ago reported figure.

Keysight has a long-term earnings growth expectation of 12%. Keysight delivered an average earnings surprise of 8.2% in the last four reported quarters.

Workday, Inc. WDAY is slated to release second-quarter 2025 earnings on Aug. 21. The Zacks Consensus Estimate for earnings is pegged at $2.09 per share, suggesting a growth of 19.4% from the year-ago reported figure.

Workday has a long-term earnings growth expectation of 18.8%. Workday delivered an average earnings surprise of 9.7% in the last four reported quarters.

Telephone and Data Systems, Inc. TDS is slated to release second-quarter 2025 earnings on Aug. 11. The Zacks Consensus Estimate for loss is pegged at 1 cent per share, suggesting a growth of 92.3% from the year-ago reported figure.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research