Motorola Beats Q4 Earnings Estimates on Record Revenues & Margins

Motorola Solutions, Inc. MSI reported strong fourth-quarter 2025 results with all-time high revenues, operating earnings and operating margin, driven by 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 record backlog and 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 $649 million or $3.86 per share compared with $611 million or $3.56 per share in the year-earlier quarter. Excluding non-recurring items, non-GAAP earnings in the quarter were $771 million or $4.59 per share compared with $693 million or $4.04 per share in the year-ago quarter. The year-over-year increase in GAAP and non-GAAP earnings was primarily attributable to top-line growth. The bottom line beat the Zacks Consensus Estimate by 23 cents. 

For 2025, Motorola reported GAAP earnings of $2.15 billion or $12.75 per share compared with $1.58 billion or $9.23 per share in 2024. Non-GAAP earnings in 2025 improved to $2.6 billion or $15.38 per share from $2.37 billion or $13.84 per share a year ago.

Revenues

Quarterly net sales were $3.38 billion, up 12% year over year. Solid sales in both segments across all regions were driven by a robust business model and strong orders across the portfolio. The top line beat the consensus estimate of $3.34 billion. For 2025, Motorola recorded revenues of $11.68 billion, up 8% year over year on strong growth across both segments.

Region-wise, quarterly revenues increased 7% in North America to $2.36 billion, driven by growth in mission-critical networks (MCN), command center software and video security products. International revenues increased 26% to $1.02 billion, driven by solid video security and command center software sales. Acquisitions contributed $188 million to revenues, while foreign exchange tailwinds were $30 million.

Segmental Performance

Net sales from Products and Systems Integration were $2.16 billion (up 11% year over year), with an increase in video security products and MCN. The segment’s backlog was down $323 million to $3.8 billion, primarily due to solid MCN shipments.

Net sales from Software and Services were up 15% to $1.22 billion, with solid performance across command center software, MSN, LMR and video security services. The segment’s backlog increased $1.4 billion to $11.9 billion, led by strong demand across all three technologies.

Other Quarterly Details

GAAP operating earnings increased to $944 million from $814 million in the prior-year quarter, while non-GAAP operating earnings were up to $1.09 billion from $916 million. The company ended the fourth quarter with a record backlog of $15.7 billion, up $1 billion year over year on record orders.

Overall, GAAP operating margin was 27.9%, up from 27%, while non-GAAP operating margin was a record high of 32.1% compared with 30.4% in the year-ago quarter, driven by higher sales, favorable mix and improved operating leverage, partially offset by higher tariffs. Non-GAAP operating earnings for Products and Systems Integration increased to $667 million from $594 million for a margin of 30.9%, up from 30.5%. Non-GAAP operating earnings for Software and Services were $419 million, up from $322 million, for a non-GAAP operating margin of 34.3%, up from 30.3% due to the higher sales and improved operating leverage.

Cash Flow and Liquidity

Motorola generated $1.26 billion in cash from operating activities in the reported quarter compared with $1.07 billion a year ago, bringing the respective tallies for 2025 and 2024 to $2.84 billion and $2.39 billion. Free cash flow in the fourth quarter was $1.14 billion. The company repurchased $490 million worth of stock during the quarter. As of Dec. 31, 2025, MSI had $1.16 billion of cash and cash equivalents with $8.41 billion of long-term debt compared with respective tallies of $2.1 billion and $5.67 billion a year ago.

Guidance

For first-quarter 2026, Motorola expects non-GAAP earnings in the range of $3.20 to $3.25 per share on revenue growth of 6-7%.

For 2026, Motorola currently expects non-GAAP earnings in the range of $16.70-$16.85 per share on revenues of approximately $12.7 billion, with healthy growth 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 fourth-quarter 2025 earnings on Feb. 12. The Zacks Consensus Estimate for earnings is pegged at 75 cents per share, suggesting growth of 15.4% from the year-ago reported figure.

Arista has a long-term earnings growth expectation of 20.1%. Arista delivered an average earnings surprise of 10.2% in the last four reported quarters.

Akamai Technologies, Inc. AKAM is slated to release fourth-quarter 2025 earnings on Feb. 19. The Zacks Consensus Estimate for earnings is pegged at $1.75 per share, indicating 5.4% growth from the year-ago reported figure.

Akamai has a long-term earnings growth expectation of 6%. Akamai delivered an average earnings surprise of 10.5% in the last four reported quarters.

Pinterest, Inc. PINS is set to release fourth-quarter 2025 earnings on Feb. 12. The Zacks Consensus Estimate for earnings is pegged at 67 cents per share, implying growth of 19.6% from the year-ago reported figure.

Pinterest has a long-term earnings growth expectation of 27.7%. Pinterest delivered an average negative earnings surprise of 6.8% in the last four reported quarters.

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