MSI Q4 Deep Dive: AI-Driven Solutions and Backlog Expansion Propel Growth

Public safety technology company Motorola Solutions (NYSE:MSI) beat Wall Street’s revenue expectations in Q4 CY2025, with sales up 12.3% year on year to $3.38 billion. Its non-GAAP profit of $4.59 per share was 5.4% above analysts’ consensus estimates.

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StockStory’s Take

Motorola Solutions' fourth quarter results were positively received by the market, reflecting the company’s ability to deliver double-digit revenue growth and surpass consensus expectations. Management attributed this performance to robust demand across both the Products and SI, and Software and Services segments, with notable order strength in mission-critical communications, video security, and cloud-based Command Center offerings. CEO Gregory Q. Brown emphasized that the company ended the year with a record backlog of $15.7 billion, driven by “record orders in both segments.” The successful integration of recent acquisitions and the launch of new AI-powered products, such as the SVX body-worn assistant, further supported quarterly momentum.

Looking ahead, management’s guidance for the coming year is underpinned by a strong backlog, ongoing cloud adoption in Command Center software, and the rollout of new AI Assist Suites for public safety. CFO Jason J. Winkler noted that Software and Services revenue is expected to grow 10%–11%, with Command Center targeted for 15% growth, supported by expanded feature adoption and role-based pricing models. Management acknowledged incremental cost headwinds from tariffs and memory but expects margin expansion through product mix and operational leverage, with Brown stating, “We are very well positioned entering this year as safety and security continue to be prioritized by our public safety and defense customers worldwide.”

Key Insights from Management’s Remarks

Management highlighted that growth was fueled by strong customer adoption of advanced solutions, successful integration of acquisitions, and expansion in both domestic and international markets.

• AI-powered product traction: The launch of SVX, a body-worn assistant integrating secure voice, video, and AI, was highlighted as a key innovation. Over 15,000 units shipped since launch, and management expects growing adoption with several hundred customer quotes in the pipeline.
• Command Center software momentum: The Command Center portfolio—including cloud-based 911 call handling and APEX Next applications—drove 15% revenue growth in the segment. Management pointed to successful customer implementations and the rollout of AI-powered Assist Suites for dispatchers and responders as future growth catalysts.
• Silvus acquisition impact: The Silvus acquisition enabled entry into defense and unmanned systems, with strong order volume driven by demand in Ukraine, the UK, and Germany. Management raised Silvus revenue expectations for the coming year based on robust international growth and integration progress.
• International and quick-turn orders: International revenue rose 26% year-over-year, attributed to large orders in North Africa and Europe. Management noted a shift toward “quick turn” revenue—projects sold and installed within the same year—reflecting normalized supply chains and increasing demand velocity.
• Recurring revenue and services strength: Software and Services, a recurring revenue business, saw notable growth in managed detection and response cybersecurity platforms and cloud-based video solutions. Management reported 77% year-over-year customer growth in cybersecurity and ongoing expansion in cloud video adoption.

Drivers of Future Performance

Motorola Solutions expects continued revenue and margin growth, led by AI-powered product adoption, cloud software expansion, and steady order momentum across key markets.

• AI and software adoption: The rollout of AI Assist Suites for dispatchers and responders is expected to drive recurring revenue and expand the company’s addressable market. Management plans a regular cadence of new product introductions and ongoing enhancements to existing suites, aiming for deeper integration across emergency workflows.
• Backlog and order pipeline: A record $15.7 billion backlog, coupled with consistent double-digit order growth, positions the company for robust performance. Management expects second-half revenue acceleration and ongoing strength in international and defense markets, particularly through further Silvus integration.
• Cost and margin management: While incremental headwinds from tariffs and memory costs are anticipated, the company plans to offset these through pricing actions, favorable product mix, and operational efficiency. Management projects 100 basis points of operating margin expansion, with higher-margin software and services expected to be major contributors.

Catalysts in Upcoming Quarters

Looking ahead, the StockStory team will be watching (1) the adoption pace and monetization of the new AI Assist Suites and SVX device, (2) continued execution in international and defense markets, particularly with Silvus integration, and (3) margin resilience in the face of tariffs and component cost pressures. Success in expanding recurring revenue streams and integrating cloud-based solutions will also be important signposts for future performance.

Motorola Solutions currently trades at $427, up from $421.13 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).

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