Motorola Solutions Inc (NYSE:MSI) Q3 2025 Earnings: EPS Beats Estimates, Revenue Slightly Misses

Motorola Solutions Inc (NYSE:MSI) has announced its financial results for the third quarter of 2025, delivering a performance that narrowly surpassed analyst expectations on profitability while experiencing a slight revenue shortfall. The company's report highlighted robust demand for its safety and security technologies and included an upward revision to its full-year earnings guidance.

Earnings and Revenue Performance

The technology provider reported non-GAAP earnings per share of $4.06 for the quarter, exceeding the consensus estimate of $3.89. This represents a 9% increase compared to the $3.74 reported in the same period last year.

However, the company's revenue of $3.009 billion came in slightly below analyst projections of $3.018 billion. Despite this minor miss, sales grew 8% year-over-year from $2.790 billion in the third quarter of 2024.

Key financial highlights from the quarter include:

• Non-GAAP Operating Margin: 30.5%, an 80 basis point improvement from 29.7% in Q3 2024
• Operating Cash Flow: $799 million, up from $759 million year-over-year
• Free Cash Flow: $733 million, compared to $702 million in the prior year period
• Quarterly Backlog: Record Q3 backlog of $14.6 billion, up 3% from the year-ago quarter

Market Reaction and Price Action

Following the earnings release, market reaction appears muted in after-hours trading. This neutral response suggests investors are balancing the positive earnings beat and raised guidance against the slight revenue miss. Recent stock performance shows:

• Minimal movement in after-market trading
• A decline of approximately 3.2% over the past week
• A drop of about 5.4% over the past month

The market's cautious stance in recent weeks may reflect broader sector concerns or profit-taking ahead of earnings, with the current results doing little to dramatically alter the near-term trajectory.

Business Segment Performance

Motorola's two primary business segments showed varied growth patterns during the quarter:

Products and Systems Integration

• Sales of $1.897 billion, representing 6% year-over-year growth
• Driven by strength in Mission Critical Networks and Video Security & Access Control
• Non-GAAP operating margin of 29.3%, consistent with the year-ago period

Software and Services

• Sales of $1.112 billion, achieving 11% year-over-year growth
• Non-GAAP operating margin of 32.6%, expanding from 30.6% in Q3 2024
• Demonstrating the company's successful shift toward higher-margin recurring revenue streams

Strategic Developments and Outlook

CEO Greg Brown characterized the quarter as "outstanding," pointing to record third-quarter revenue, earnings, and cash flow. The company's recent acquisition of Silvus Technologies was noted as being "off to a strong start."

Looking ahead, Motorola provided guidance for the fourth quarter and updated its full-year outlook:

Fourth Quarter 2025 Guidance

• Revenue growth of approximately 11% compared to Q4 2024
• Non-GAAP EPS between $4.30 and $4.36 per share

Full-Year 2025 Guidance

• Maintaining revenue guidance of approximately $11.65 billion (7.7% growth)
• Raising non-GAAP EPS guidance to $15.09-$15.15 from the previous range of $14.88-$14.98

The company's fourth-quarter revenue guidance of approximately 11% growth suggests sales around $3.097 billion, which would fall short of analyst estimates of $3.402 billion. However, the EPS guidance range brackets the current analyst consensus of $4.33 for the coming quarter.

Capital Allocation and Notable Wins

During the quarter, Motorola demonstrated disciplined capital management:

• Paid $182 million in cash dividends
• Repurchased $121 million of common stock
• Settled $70 million of 6.5% debentures

The company also announced several significant contract wins, including:

• A $110 million P25 system upgrade for the State of Colorado
• An $84 million P25 system upgrade for the Tennessee Department of Safety
• A $57 million P25 services order for the State of Louisiana
• Multiple international orders including a $10 million Silvus order for a NATO country

For more detailed earnings analysis and future estimates, investors can review additional information on the company's earnings page.

Disclaimer: This article is for informational purposes only and does not constitute investment advice, financial analysis, or a recommendation to buy or sell any securities. Investors should conduct their own research and consult with a qualified financial advisor before making investment decisions.