Motorola Surpasses Q3 Earnings Estimates on Healthy Revenue Growth

Motorola Solutions, Inc. MSI reported strong third-quarter 2025 results with a healthy year-over-year increase in revenues and operating earnings, driven by the diligent execution of operational plans and robust growth dynamics backed by solid order trends.

Adjusted earnings and revenues topped 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 $562 million or $3.33 per share compared with $562 million or $3.29 per share in the year-earlier quarter. Excluding non-recurring items, non-GAAP earnings in the quarter were $686 million or $4.06 per share compared with $639 million or $3.74 per share in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate by 21 cents.

Revenues

Quarterly net sales were $3.01 billion, up 8% 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 $2.99 billion. 

Region-wise, quarterly revenues increased 6% in North America to $2.12 billion, driven by growth in LMR, command center software and video security products. International revenues increased 13% to $888 million, driven by solid LMR sales. Acquisitions contributed $123 million to revenues, while foreign exchange tailwinds were $21 million.

Segmental Performance

Net sales from Products and Systems Integration were $1.9 billion (up 6% year over year) with an increase in video security products and mission-critical networks (MCN). The segment’s backlog was down $604 million to $3.6 billion, primarily due to solid MCN shipments.

Net sales from Software and Services were up 11% to $1.11 billion, with solid performance across command center software, MSN, LMR and video security services. The segment’s backlog increased $1.1 billion to $11 billion, led by strong demand across all three technologies.

Other Quarterly Details

GAAP operating earnings increased to $770 million from $711 million in the prior-year quarter, while non-GAAP operating earnings were up to $918 million from $830 million. The company ended the third quarter with a backlog of $14.6 billion, up $467 million year over year on record orders.

Overall, GAAP operating margin was 25.6%, up from 25.5%, while non-GAAP operating margin was 30.5% compared with 29.7% in the year-ago quarter. Non-GAAP operating earnings for Products and Systems Integration increased to $555 million from $522 million for a margin of 29.3%. Non-GAAP operating earnings for Software and Services were $363 million, up from $308 million, for a non-GAAP operating margin of 32.6% due to the higher sales and improved operating leverage.

Cash Flow and Liquidity

Motorola generated $799 million in cash from operating activities in the reported quarter compared with $759 million a year ago, bringing the respective tallies for the first nine months of 2025 and 2024 to $1.58 billion and $1.32 billion. Free cash flow in the third quarter was $733 million. The company repurchased $121 million worth of stock during the quarter. As of Sept. 27, 2025, MSI had $894 million of cash and cash equivalents with $8.41 billion of long-term debt.

Guidance

For fourth-quarter 2025, Motorola expects non-GAAP earnings in the range of $4.30 to $4.36 per share on revenue growth of approximately 11%.

With solid quarterly results and robust demand patterns, the company raised its guidance for 2025. It currently expects non-GAAP earnings for 2025 in the $15.09-$15.15 per share range, up from $14.88-$14.98 on revenue growth of 7.7% or $11.65 billion, 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

Arista Networks Inc. ANET is scheduled to release third-quarter 2025 earnings on Nov. 5. The Zacks Consensus Estimate for earnings is pegged at 72 cents per share, suggesting a growth of 20% from the year-ago reported figure.

Arista has a long-term earnings growth expectation of 18.7%. Arista delivered an average earnings surprise of 12.8% in the last four reported quarters.

Akamai Technologies, Inc. AKAM is slated to release third-quarter 2025 earnings on Nov. 6. The Zacks Consensus Estimate for earnings is pegged at $1.64 per share, indicating a 3.1% growth from the year-ago reported figure.

Akamai has a long-term earnings growth expectation of 4.9%. Akamai delivered an average earnings surprise of 7.1% in the last four reported quarters.

Pinterest, Inc. PINS is set to release third-quarter 2025 earnings on Nov. 4. The Zacks Consensus Estimate for earnings is pegged at 42 cents per share, implying a growth of 5% from the year-ago reported figure.

Pinterest has a long-term earnings growth expectation of 33.9%. Pinterest delivered an average negative earnings surprise of 1.1% in the last four reported quarters.

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

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