Motorola Solutions Inc (NYSE:MSI) closed out its 2025 fiscal year with a strong fourth quarter, posting revenue and earnings that exceeded Wall Street's expectations. The public safety and communications technology leader reported results that underscored robust demand across its government and commercial customer base, leading to a positive after-hours market reaction.
Earnings and Revenue Highlights
The company's fourth-quarter performance demonstrated solid top-line growth and expanding profitability.
- Revenue: Sales reached $3.38 billion, a 12.3% increase compared to the $3.01 billion reported in the fourth quarter of 2024. This figure narrowly surpassed analyst consensus estimates of approximately $3.379 billion.
- Earnings Per Share (Non-GAAP): The company reported adjusted earnings per share of $4.59, which came in 5.4% above the average analyst estimate of $4.39 per share.
For the full year 2025, Motorola Solutions achieved record sales of $11.68 billion, an 8% increase over the prior year. Non-GAAP earnings per share for the year were $15.38, up 11% year-over-year. The company also highlighted record operating cash flow of $2.8 billion and record free cash flow of $2.6 billion, signaling strong financial health.
Market Reaction and Price Action
The market responded favorably to the earnings beat and the company's forward-looking commentary. Following the earnings release, Motorola Solutions' stock traded higher in after-hours activity, showing an increase of approximately 1.97%. This positive momentum builds on a steady performance over recent weeks, with the stock up about 3.96% over the past two weeks and 7.7% over the past month, indicating investor confidence ahead of the report.
Key Business Segment Performance
The earnings release detailed strength across both of Motorola's core segments, with particular momentum in its higher-margin software and services business.
- Products and Systems Integration: This segment, which includes mission-critical communications devices and infrastructure, saw sales grow 11% year-over-year to $2.16 billion for the quarter.
- Software and Services: This segment was the standout performer, with sales increasing 15% to $1.22 billion. More importantly, it demonstrated significant margin expansion, with GAAP operating earnings jumping 30% year-over-year. The segment ended the year with a record backlog of $15.7 billion, up $1 billion from the prior year, driven largely by a 13% increase in software and services backlog.
Forward Guidance and Analyst Expectations
Looking ahead, management provided an outlook for the first quarter and full year of 2026 that appears largely in line with existing analyst projections.
- Q1 2026 Outlook: The company expects revenue growth of 6% to 7% year-over-year and non-GAAP EPS between $3.20 and $3.25. Analyst estimates had been calling for Q1 revenue of approximately $2.78 billion and EPS estimates around $3.25.
- Full-Year 2026 Outlook: Motorola Solutions anticipates full-year revenue of approximately $12.7 billion and non-GAAP EPS in the range of $16.70 to $16.85. This compares to current analyst consensus estimates for sales of $12.73 billion and earnings per share of $16.48.
The guidance suggests management is confident in the company's momentum, supported by its record backlog and continued demand for public safety technology. CEO Greg Brown cited "record backlog and strong demand" as drivers for continued momentum into the new fiscal year.
Press Release Summary
Beyond the financial figures, the earnings report emphasized several critical points:
- Record Financials: The company stressed 2025 was a year of record sales, earnings, and cash flow.
- Capital Allocation: Motorola remained active, repurchasing $1.2 billion of its common stock and paying $728 million in dividends during 2025, while also closing four acquisitions for $4.9 billion.
- Notable Contract Wins: The quarter included several large deals, such as a $180 million system expansion for the State of Tennessee and a $201 million services renewal for the State of Maryland, highlighting the durability of its government contracts.
For a detailed breakdown of past earnings and future analyst estimates for Motorola Solutions, you can review the data here.
Disclaimer: This article is for informational purposes only and does not constitute financial advice, a recommendation to buy or sell any security, or an endorsement of any investment strategy. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.
